Jagsonpal announces Buyback of equity shares

The Board of Directors of Jagsonpal Pharmaceuticals Limited at its meeting today approved a proposal to buyback up to 16,00,000 fully paid-up equity shares of the company through Tender Offer method, subject to shareholders approval. This represents 2.4% of the total equity shares of the Company and 7.3% of the non-promoter shareholding of the company.

The proposed buyback will be undertaken for an aggregate amount not exceeding ₹ 40 crores, representing ~18.4% of the company's total paid-up equity share capital and free reserves based on the latest audited financial statements as of 31 March 2025.

Rationale for the proposed Buyback:

a. The Company operates with an asset-light business model, which requires insignificant capital to scale-up, other than for inorganic initiatives

b. The Company has added over ₹ 142 crores of free cash between FY22 to FY25, despite increased dividends and ₹ 95 crores deployed for acquisition

c. As on December 31, 2025, the Company has free cash of ₹ 176 Crores

d. The Company added ₹ 30 crores of free cash during the 9M period ended December 31, 2025 and also paid out a dividend of ₹ 17 crores

e. With the recent regulatory changes allowing M&A funding by banks, the Company intends to use blend of equity and debt for any inorganic growth opportunity

f. The proposed buyback shall lead to ~400 bps improvement in ROCE

The promoters of the Company shall not be participating in the buy-back. The promoter shareholding shall increase from current 67.2% to 68.9% post completion of buyback, assuming buyback of 16 lakh equity shares.

Manish Gupta, Managing Director, Jagsonpal Pharmaceuticals Limited, said: "The proposed buyback demonstrates the company's continued commitment to enhancing shareholder value and optimizing its capital structure. This isintended to reward shareholders and is expected to improve key metrics including earnings per share and return on capital employed, while maintaining sufficient capital to support the company's ongoing growth initiatives including exploring inorganic initiatives.

Source : Equity Bulls

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