The offer is being made at Rs 75 per share, 30% more than its closing price of Rs 57.70 on Monday on the BSE.
The board of Jagran Prakashan on Monday approved a proposal to buy back a maximum of 1.35 crore shares for a total amount not exceeding Rs 101.25 crore. The share buyback represents 4.55% of the existing paid-up equity capital of the company.
The offer is being made at Rs 75 per share, 30% more than its closing price of Rs 57.70 on Monday on the BSE. The stock fell 6.6% on Monday, its biggest single-day fall in the last four months. The stock has lost 50.1% since January against the Sensex’s gain of 12.3%.
Jagran Prakashan has cash and equivalents of Rs 438.50 crore on its book as on September 30. The promoters held 61.62% in the company as on December 6. Jagran Prakashan that has businesses across print, radio, out-of-home (OOH) and digital segments reported revenue from operations at Rs 514.49 crore in the three months ended September on a consolidated basis, against Rs 553.44 crore in the year-ago quarter.
The profit after tax, however, increased to Rs 125.78 crore, compared with Rs 44.87 crore in Q2FY19. Total expenses decreased to Rs 468.41 crore in Q2FY20 from Rs 490.23 crore in Q2FY19. “The festive season is over, but unfortunately it was way below expectation. However, in run up to the festive season, Q2 benefited a bit on account of increased ad spend by auto industry,” the company said in Q2FY20 earnings call. Advertisement spend by the auto industry saw a 3% de-growth in Q2.
The company said it continues to strengthen its balance sheet and has reduced debts to negligible level at the group level with net cash and liquid assets worth nearly Rs 400 crore as at the end of the second half.
“We expect the benefit of reduction in newsprint price to show up over coming quarters,” Edelweiss Securities said in a note on Jagran Prakashan last month. However, resumption of ad spends by key advertisers (FMCG, auto, Centre), onslaught from digital media and dipping circulation revenue growth pose significant risks for the company, analysts at Edelweiss said.