Chaivik Beverages offers to buy back an angel's 1.5% stake at a 30% discount to its last round. What is the price, what multiple does the angel make, and what happens to everyone else?

The angel receives Rs 3.36 crore, 5.6x the Rs 60 lakh paid, and every other holder's percentage rises by about 1.5% of itself. The founders go from 55% to 55.84%. Because the shares are bought below the last-round price, remaining holders gain slightly in value too, about 0.46%. The cost is Rs 3.36 crore of cash, 8.4% of the balance.

At the last round's price the stake is worth 1.5% of Rs 320 crore, Rs 4.80 crore. A 30% discount takes it to Rs 3.36 crore. A discount on a small private stake is normal, because the angel has no other buyer, no board seat and no control over when an exit comes. Think of selling a share in a family property to a relative: you accept less than the full market price because nobody else will buy a fractional interest. The angel paid Rs 60 lakh, so the multiple is 5.6x; the original entry valued the company at Rs 40 crore.

When a company buys back shares and cancels them, the total share count falls, and nobody else's share count changes. Every remaining holder's percentage is divided by 0.985, a rise of 1.52% of whatever they held. The founders go from 55% to 55.84%, the investors from 36% to 36.55%, and the pool from 7.5% to 7.61%. Nobody absorbs the angel's 1.5%; it is spread pro rata by arithmetic.

Value the company at its last round, Rs 320 crore. Paying out Rs 3.36 crore of cash leaves Rs 316.64 crore of value, now owned by holders of 98.5% of the old shares. Per 100% of the old share count that is Rs 321.46 crore, 0.46% more than before. Buying shares below their value transfers that discount to the holders who stay; buying above it would transfer value the other way. The gain is small because the stake is small, but the direction is the point.

Cash is the cost that matters in a growing consumer company. Rs 3.36 crore is 8.4% of the balance; if Chaivik burns Rs 2 crore a month, that is about seven weeks of runway spent on a shareholder rather than the business. The usual alternative is a secondary saleA sale of existing shares from one holder to another. The company receives no money and its share count does not change. to an existing investor, which moves the shares without touching the company's cash. A buyback by an Indian company is also subject to company law conditions on how it is funded, who must approve it and how much can be bought in a period; confirm the current rules before proposing it.

The view: the price is reasonable for both sides, and the ownership arithmetic is benign. But if Chaivik is still burning cash, the board should first offer the stake to its Series A investors at the same price. They get more of a company they already back at a discount, and the company keeps its runway.