We had recommended Jagran Prakashan on 22Mar18 with the report titled Jagran Prakashan: Numero Uno in Print Media. Below is the small update on the same.
On 24th April 2018, Jagran Prakashan board has approved the buyback of 1,50,00,000 (1.5 crores) equity shares at a price of Rs.195 per share under tender offer method. This represents 4.82% of total outstanding equity capital. Being a high cash generating company and having good cash surplus on balance sheet, Jagran Prakashan will utilize Rs.292.50 crores to buyback its own shares from its internal accruals and will not have to borrow funds in any form for paying the buyback consideration. On the procedural front, Jagran Prakashan has sought the approval of shareholders for buyback of shares through the special resolution.
Good Capital Allocation: As mentioned in our earlier report, Jagran Prakashan consistently generates a large surplus of cash every year and has shown capacity to utilize it well for its shareholders by deploying the surplus funds either for acquisition / expansions or for retiring the most expensive source of fund i.e. owners fund by launching buyback.
The proposed buyback is in line with the good capital allocation strategy that the company has been following.
Past Buyback Data:
Past Acquisitions and Expansions:
Dhruvesh Sanghvi is a Research Analyst registered with SEBI having registration No: INH000000875.
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1. Neither Dhruvesh Sanghvi, Prospero Tree Financial Services, its associates, its Research analysts hold any position in the subject company.
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• Disclosure with regards to Receipt of Compensation:
1. Neither Dhruvesh Sanghvi, Prospero Tree Financial Services or its associates, or Research Analyst has received any compensation or other benefits from the subject company or the third party in connection with the research report in past twelve months.
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• Other Disclosures:
1. The Research Analyst has not served as an officer, director, or employee of the subject company.
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