Update: OnMobile has said that it has spent a total Rs 44.28 crore on the buyback including brokerage and other charges. It also shared the following data (pdf):
– The highest price at which the shares were bought back was Rs 85.80 per share on January 12, 2015 while the lowest price was Rs 68 per share on December 22, 2014. The average price was Rs 76.34 per share.
– OnMobile has extinguished around 4.82 million shares (4,821,683 shares) of the total 5.8 million shares as of Jan 20, 2014 and the company is in the process of extinguishing the remaining 0.9 million shares (978,317 shares).
Earlier (Jan 16): OnMobile Global has bought back 5.8 million shares, which represents 100% of the maximum offer shares, as on January 15, 2015 and has closed the buyback offer at the day’s close yesterday. There is currently no information at what price did OnMobile pick up these shares, although it had received board approval for an amount up to Rs 49 crore at maximum of Rs 86 per share.
– OnMobile bought shares from December 22, 2014 to January 15, 2015. During this period, the shares reached a peak of Rs 88.3 and a low of Rs 69.65. With an upper limit of Rs 86 per share, the average buyback price would be Rs 77.825 per share, as per our calculations.
– At Rs 86 per share, the total buyback would have been Rs 49.88 crore. At Rs 77.825 per share (average price during the period), the total buyback would amount to Rs 45.14 crore. At the lower end, at Rs 69.65 per share, the buyback would have cost Rs 43.97 crore. Suffice to say, Onmobile would have payed between Rs 43.97 crore to Rs 49.88 crore for this buyback.
OnMobile had Rs 289.8 crore in cash & cash equivalents as of September 30, 2014.
– At the close of trading yesterday, OnMobile was priced at Rs 84.20, a marginal 2.1% lower from the maximum share price but up 8.2% from the average buyback price.
– OnMobile shares have increased by 21.8% from the time the buyback was announced last month. It had closed at Rs 69.15 on the BSE, the day before the buyback was announced.
– OnMobile share was trading at Rs 82.25, down 2.3% from the previous day’s close at the time of writing this article.
Turbulent times at OnMobile
This buyback has come at a particularly turbulent time for OnMobile as it had laid off around 383 employees in Q2-FY15 in a bid to become profitable by the end of this financial year (ending 31st March 2015). The company had reported a net loss of Rs 1.21 crore in the same quarter (Q2-FY15_, as compared with a profit of Rs 1.5 crore reported in Q2-FY14.
The new board and management team is narrowing its focus to a few sub-segments of its business, multiple employees had told MediaNama, and it appears that the investor group has taken board and management control of the company. As part of the changes, OnMobile executives that had shifted to the Livewire team in the US have been asked to leave. Livewire had a target of becoming profitable within 12 months, and the business is still in red. More on OnMobile layoffs here.
There has also been significant changes in OnMobile management with Rajiv Pancholy being appointed as the CEO of OnMobile Global in May 2014 and given additional charge of managing director in June 2014. This was after OnMobile co-founder Mouli Raman had stepped down as the managing director and CEO in May 2014.
Francois Charles Sirois was appointed OnMobile Global chairman after HH (Tony) Haight had resigned as OnMobile Global chairman and board director. Sirois is the President and CEO of Onmobile Systems Inc, which is the promoter company of Onmobile Global and its largest shareholder. More on that here.