Ajanta Pharma Buyback: From price, cash to trend, Anil Singhvi decodes details

At what price will Ajanta Pharma buyback happen? How much cash does the company still have? What was the trend in last buyback? To know all this, see Zee Business exclusive research on Ajanta Pharma’s buyback 

Zee Business Managing Editor Anil Singhvi says along with the results, today Ajanta Pharma's Board will come out with the details of Buyback (Size of the Buyback, Quantity and price of the buyback).  
Varun said the buyback could happen in the range of Rs 1850 – Rs 1900. This indicates buyback would happen at good premium to the current market price. Last time when company announced the buyback, they had 100 cr (cash in hand) and the buyback was announced at 15% -16% premium. Currently company holds 200 cr cash in hand, if one calculates 15% to 16% premium to current market price then buyback should come around Rs 1835. This is one way to calculate buyback price. 

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Looking at another way, Company has been doing buyback near 5% - 7% of its paid-up capital. So, 5% to 7% of the free reserves and considering its paid-up capital, adding 15% premium to that price, buyback price derived will be Rs 1860. Hence, there is a possibility that buyback may come in the range of Rs 1850 – Rs 1900. Quantum of the buyback could be around 1.1% to 1.3% by the company.  
Anil Singhvi highlights that company saw big move on the positive side last time after the buyback was announced. Around Rs 1900, the buyback is at a large premium to the current market price and may see similar action like last time.  

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Market expert, Sumeet Bagadia, Executive Director at Choice Broking said that stock can move upto Rs 1650 after buyback announcement. Stock has been trading in range of Rs 1560 – Rs 1570 on lower side and Rs 1650 to Rs 1660 on higher side. Strong breakout above Rs 1650 will see further upside in this stock.