Britannia Industries Ltd, the biscuits major, has been able to mop up 6 lakh shares for around Rs 34 crore from the market within 15 days of opening of the buyback offer. The company had decided to buy back 10 lakh shares from its shareholders.
A company official said the management was extremely happy with the response. "This is perhaps one of the few times when the buyback offer from a company has received such a good response in such a short span of time," the official said.
Industry analysts said that since the buyback will be through the prevailing market price, it may not have any price implications for existing investors. The company had earlier said that it had earmarked around Rs 55 crore for the buyback.
Britannia is a market leader in the biscuit and bakery products segment in the organised market. Biscuits contribute to over 80 per cent of the company's turnover.
The company recently acquired Kwality Biscuits for Rs 30 crore including the 'Kwality' and 'chef' symbols, and several other trademarks.
It has set aside Rs 50 crore for funding new projects and acquisitions. The company has issued 50 lakh secured redeemable non-convertible privately placed debentures of Rs 100 each amounting to Rs 50 crore at 10.9 per cent interest per annum for funding new projects and acquisitions.
Britannia has already announced that it will fund its in-principle agreement to acquire 49 per cent of Kwality Biscuits through internal accruals.
Additionally, Britannia is assessing the future plans of Kwality as a brand and intends to keep Kwality Biscuits as a separate company.
The official also said that Kwality Biscuits will continue to remain a separate company and there are no plans to merge the existing capacities of both Britannia and Kwality.
The company in its annual report said as slowdown in the economy will continue, maintaining topline growth rates at previous levels will be challenging.
It said Britannia Industries will continue to focus on improving its sales and profits through new product launches, renovating existing products, cost reduction and gains in productivity.
Britannia's net profit for 2000-01 rose to Rs 70.5 crore compared with Rs 51 crore for 1999-2000.
Britannia Industries posted a net profit of Rs 16.2 crore for the quarter ended June 30, 2001 compared with Rs 13.5 crore during the same period last year. Net sales for the period under review stood at Rs 349 crore compared with Rs 330 crore in the quarter ended June 30.
