Small cap stock declares share buyback of ₹61 Cr at a premium of 34%

The company has said today in a stock exchange filing that “We inform you that the Board of Directors of VRL Logistics Limited ( the “Company”) at their meeting held today viz. January 30, 2023 have approved the proposal to buy back up to 8,75,000 fully paid up equity shares having a face value of ₹10 (Rupees Ten Only) each (“Equity Shares” or “Shares”) representing up to 0.99% of the total number of equity shares in the paid-up equity share capital of the Company, at a price of ₹700/- (Rupees Seven Hundred Only) per Equity Share (“Buyback Price”) payable in cash for a maximum amount not exceeding ₹61,25,00,000/-(Rupees Sixty One crores Twenty Five Lakhs Only) (“Buyback Size”), representing 9.44% of the aggregate of the fully paid-up equity share capital and free reserves of the Company, as per the latest audited financial statements of the Company for the financial year ended March 31st, 2022.”

VRL Logistics has said that the buyback is proposed to be undertaken from the equity shareholders of the Company as on the record date i.e. 10th February, 2023.

In Q3FY23, the company reported a net income of ₹773.33 Cr against ₹683.29 Cr recorded in Q3FY22, representing a YoY growth of 13.3%. The company posted profit before tax (PBT) of ₹65.90 Cr in the quarter ended December 2022 as compared to ₹77.73 Cr recorded in the quarter ended December 2021, registering a fall of 15.2% YoY. The company recorded a net profit of ₹49.20 Cr in Q3FY23 as compared to ₹60.48 Cr reported in the year-ago quarter, representing a loss of 18.7% YoY.

VRL Logistics said in a report that “The Company has, during the current quarter, executed a Business Transfer Agreement with a promoter group company ‘Vijayanand Travels Private Limited’ for the sale / transfer of its Bus Operations Business Undertaking (Bus Operations) as a going concern on a slump sale basis for an aggregate sale consideration of ₹23000 lakhs based on the approval received from the Board of Directors vide its meeting dated 15 September 2022 and from its shareholders on 31 October 2022. The Company has received an advance of ₹22500 lakhs from the buyer against the abovementioned sale consideration. The approval from the relevant regulatory authorities for the sale transaction has been obtained on 25 January 2023 and hence, the profit before tax of ₹17690 lakhs on this sale (net of expenses incurred till 31 December 2022 of ₹11 lakhs), has not been given effect to in these Financial Results.”

“The Company had, during the previous quarter, executed a Business Transfer Agreement for the sale / transfer of its Wind Power Business Undertaking (Sale of Power) as a going concern on a slump sale basis for an aggregate sale consideration of ₹5285 lakhs. The approval from the relevant regulatory authorities for the sale transaction has been obtained on 10 January 2023 and hence, the profit before tax of ₹1034 lakhs on this sale (net of expenses incurred till 31 December 2022 of ₹6 lakhs), has not been given effect to in these Financial Results,” said the Board of Directors of VRL Logistics in a statement.

127 new branches were added in 9MFY23. The firm opened 68 new branches in Q1FY23, 29 new branches in Q2FY23, and 30 new branches in Q3FY23. The company added that it increased branch coverage and expanded its existing branch areas in key markets like Pune, Ahmedabad, Raipur, Salem, Chennai, Kanpur, Delhi, Kolkata, Patna, Guwahati, Siliguri, and Cuttack.

On the NSE, the shares of VRL Logistics Limited closed today at ₹522.00, down by 0.74% from the previous close of ₹525.90.