Adani Ports Limited Buyback 2019

APSEZ is the seamless integration of 3 verticals consisting of Ports, Logistics and Special Economic Zone. The company has pan India presence in ten locations with the flagship Mundra port in the Gulf of Kachchh, also India’s largest commercial port.

Business of the Company:

1. Logistics

2. Industrial Lands

3. Ports & Terminals

Buy Back Offer Deal:

Buyback Type: Tender offer
Buyback Record Date: Jun 21 2019
Buyback Opening Date: Sep 06 2019
Buyback Closing Date: Sep 20 2019
Buyback Offer Amount: ₹ 1,960 Cr
Date of Board Meeting approving the proposal: Jun 04 2019
Date of Public Announcement: Jun 04 2019
Buyback Offer Size: 1.89%
Buyback Number of Shares: 39200000
FV: 2
Buyback Price: ₹ 500 Per Equity Share

Details of Buyback:

ADANI Port has approved the proposal for the buy-back by the Company of up to 3,92,00,000 Equity Shares (being 1.89% of the total paid-up Equity Share Capital of the Company) from the equity shareholders of the Company as on June 21, 2019 (the “Record Date”) (“Eligible Shareholders”). The (“Buy-Back”) is to be done at a price of Rs. 500 (Rupees Five Hundred Rupees only) per Equity Share (the “Buy-Back Offer Price”), for an aggregate amount not exceeding Rs. 1,960 Crores (Rupees One Thousand Nine Hundred Sixty Crores only), (the “Maximum Buy-Back Size”, being 9.94% of the total paid-up Equity Share Capital and free reserves of the Company as per the audited standalone financial statement as at March 31, 2019) from the Eligible Shareholders of the Company on a proportionate basis through " Tender Offer route" .

Salient financial parameters:

Particulars(Cr) 2019 2018 2017 2016 2015
Total Revenue 12,287.78 12,333.89 9,479.46 7,841.32 6,837.62
Total Expenses 7,092.55 6,944.58 5,300.59 4,721.88 4,336.41
Profit/Loss For The Period 4,044.81 3,689.95 3,892.24 2,836.63 2,324.49
Basic EPS (Rs.) 19 18 19 14 11
IZ Review 1. The company has shown strong growth in terms of Revenue in the last 4 years. The Revenue is almost doubled in the last 4 years means CAGR growth of 18%. 2. The Profitability also went up 2x in the last 4 years. 3. For FY18-19, the company has given an EPS of 19. So currently share is trading at P/E multiple of 21x. 4. The company has Debt of ~ 25000 Cr on balance sheet. The D/E stands at 0.92.

How to Participate in buyback?

1. Firstly, to be eligible for the buyback the investor should have shares of Adani Ports Limited Buyback 2019 in demat or physical form as on the record date [ 21.06.2019 ] 2. Once you have shares in demat, you can participate in the buyback process which is opening from [ 06.09.2019 to 20.09.2019 ] by selling your shares through your broker on NSE or BSE. 3. Then on [ 01.10.2019 ], the payment will be given to you for accepted shares and unaccepted shares will be returned to your demat account.

Profit from the buyback on the bases of acceptance Ratio:

Buy 400 Shares at CMP of Rs. 425 [2,00,000/500=400)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,70,000 1,70,000 1,70,000 1,70,000
No. of Shares buyback 132 200 300 400
BuyBack Profit 9900 15000 22500 30000
Profit 5.75% 8.79% 13.08% 17.44%

Recommendation:

Review and Recommendation of Adani Ports Limited Buyback 2019 by IZ team is 5/10 Fair:1-5 Good: 6-7 Excellent: 8-10 [ The buyback size is decent. The expected AR as on now is 25-30%. There is arbitrage of 17% from CMP of 425. In FY18-19, the company has shown decent growth in bottom-line in spite of week top-line which is excellent. Currently, the share is trading at P/E of 22 which is reasonable valuation.]

    20.09.2091 3:30 PM

    Particulars————–NSE ————-BSE—————-Total

    QIB ——————- 4.90 Cr——– 13.19 Cr ———— ~18 Cr

    NII———————2.40 Cr——— 1.75 Cr————- ~4.1 Cr

    Individuals———– 26.41 Lakh ——- 1.98 Cr———- ~2.21 Cr

    Govt. announced no tax on buyback for companies who had announced it prior to July 5. This announcement is out on last day of Adani Ports buyback otherwise Adani Ports would have been liable to pay TDS for the Buyback on last date of Settlement. What a nice timing for Adani Ports.

      20th Sept announcement is applicable for all those companies that have announced buyback before 5th July, even though buyback proceeding could continue later too.

    Particulars————–NSE ————-BSE—————-Total

    QIB ——————- 4.90 Cr——– 12.78 Cr ———— ~17 Cr

    NII———————2.40 Cr——— 1.75 Cr————- ~4.1 Cr

    Individuals———– 23.41 Lakh ——- 1.84 Cr———- ~2.07 Cr

    So accepted AR for retail maybe around 35-40%.

    ***forwarded***

    Adani port payment

    27.09.2019

    4 day early che.

    💐🌕

    1.20 crore bids against 60 lakh.. So as of now 50% aceeptence ratio. But 3 more days to go.
    Final acceptence ratio will be 30%.

    If I sold shares on 6/20 prior to record date 6/21 can I include these shares in the tender since the settlement date is not until 6/24? I also purchased additional shares after 7/1.

    i was having 400 shares of adani port in my dmat account on record date . after that i have sold it . can i participate in buyback by repurchasing fresh share before buyback closing date ? will my tender considered for buyback ?

    adaniport LTD

    letter of offer

    Entitlement:

    Retail= 19 out of 92 i.e. 20.665%

    General Category= 1 out of 61 i.e. 1.63%

    Forwarded Message:

    Adaniport entitlement 20.47%

    92/450

    Letter Of Offer & Entitlement Mail/Letter will be released by the company within this Thursday (29 Aug’19)

      As per the empirical data based calculations 32% (+or -5%) likely entitlement ratio…No official letter of offer received yet..

      hoga Bhai, within 10-15 days sure-shot announcement will come.

        MW – You seem to know someone very influentially 🙂

        What is the likely acceptance ratio ? As results are good, do you believe that this can be held for long term also.

        hello MW

        Any problem adaniport buyback?

        Some record date come , why adaniport not come

        He is saying that dates are being announced for other company buybacks but not for adani, why?

      There is a news in the market that by next week we gonna hear something positive in the counter.

    InvestorZone can remove the buyback column, as all buyback will soon be cancelled. For companies, paying dividend is much cheaper than buyback now.

    sir what are the chances of adani buy back getting cancelled… i bought shares yesterday and today sold 70 % of my shares . Is there a risk with the remaining 30% or should i sell the complete lot ..please advice

          It may fall below 400. The market is punishing all companies, group companies where there is a debt. Adani Group companies have huge debt, so be careful.

    i have exact 400 shares of adani ports , shd i transfer all 400 shares to my demat r only 399 shares? market wizard pls help

    Most of the equity is held by promoters, foreign promoters; FIIs . Small portion is held by mutual fund and banks.

    Huge fall today
    Should we participate or it will fall drastically tommorow
    Mw any views
    Also what is happening with qyickheal, every review said it is a sound company, why it is falling down so much

      Do not buy Adani Port without hedging. Quick heal don’t know what is happening with stock.

    Buy back size is 1.89 percent while retail equity is only 2.18 percent.
    Only 1.78 percent equity is held by less than 2 lakh.

    Modified government will remain for 5 years.
    Company has doubled net profit and turnover in last four years.
    In this company; debt is not more.

    Hi..MW…
    As today is last day to buy for buyback…

    Rates stable from last many days…

    So now apx AR?

    Avoid these buyback because of many reason.
    1.price is recently 350 on 15 may. Price move to 425 only because of modi sarkar came again.so price is likely to come 350 again(high chances)
    2.buyback size is only 1.89% so retail acceptance ratio will not high it will be around 15% to 20%
    3.as market wizard told earlier it is high chance that sebi cancel this buyback due to high liability

    So avoid this buyback.

    Apart from your buy price, the profitability or otherwise will really depend on the then sentiment prevailing because if the mkt price declines a lot you will suffer loss on the shares you are left holding after participating in buy-back. In other words your revenue returns will be good but there may be a capital loss.

    If i buy 50 shares…will all my shares be taken in buyback……will i book profit even if i sell shares which are not taken in buyback

      Unlikely that all shares be taken in buyback. Further the price may be less than 400 to sell unaccepted shares. Though everything depends upon how many people jump in to buy for buyback.

    Sir
    Now buyback is going on or it may face some difficulty from sebi

    is it good to go for purchase of shares of Adani port or Wipro? as both have 21 june as record date.which one is more beneficial and what would be AR for both?

      please read the old messages in the forum

    Confirm if this is tender route or open offer
    Also confirm what will be ideal price to participate in buyback

    Plz update your records there is no announcements regarding RECORD Date……

    Wipro has announced Record date for 21st June instead of Adani Port

      Adani Ports and Special Economic Zone Ltd has informed BSE that the Company has fixed June 21, 2019 as the Record Date for the purpose of Buy Back of Equity Shares.

    ***Forwarded as Received***

    But why has *Adani Ports announced such a large buyback* , particularly in light of the fact that its business requires money and it announced acquisitions in the past. More importantly, if it really wanted to create value for shareholders, why did it not opt for buyback of share through the tender mechanism?

    Markets know it well. Despite the announcement of buyback of shares at 18 percent premium to its market price, the stock did not react much and closed with a mere 0.35 percent jump at Rs 425.40.

    How will it create value?

    Nevertheless, there is some merit in this decision. Adani Ports is the largest company of the Adani Group, with a market capitalisation of over Rs 88,000 crore where promoters own 62.3 percent. It has the lucrative hard assets and is sitting on cash. And that has provided a huge support to the group. The promoters have pledged their holdings to the extent of 42.31 percent in the company, which is worth Rs 23,200 crore based on the current market price.

    Considering the market capitalization of the company and the size of the pledge, such large buyback makes sense in the event of an unwanted correction in the share price. In the recent past, companies with high promoter pledge shares have been hammered and had cascading effect on the group companies. In the case of Adani Ports, the buyback seems to be a good reason that should keep any institutional short sellers at bay, protecting shareholders.

      This article appeared on moneycontrol.com. Promoter would get more than 1000creores by way of this Buyback which can be used to release pledge on atleast 5% of the shares. also, this is a Tender offer and Record date is just a few days away and not an open offer.

      NO!! The number of shares buyback by the company will depend upon Acceptance Ratio which will be decided on a number of shareholders on Record date.

    *Savita Oil*
    *Buy–back*

    Record Date: 12-June

    *CMP: 1295/-*
    *Buy Back price: 1605/-*

    Any information about this ?

    It is heard that there are high chances that SEBI may not approve Adani Port Buyback due to high debt in group companies.

    The same thing as happened in L&T.

          SEBi comments are received after Record date. The company should file draft Letter of Offer with SEBI soon.

      Good that people are skeptical. This skepticism would ensure that price does not fly. Even Tata Group Companies have huge debts and TCS has still completed Buybacks. Even Govt. of India has huge debts and still Coal India etc. had got approval for Buybacks.
      What matters is what is the Consolidated Debt to Equity for Adani Ports post Buyback. Debts should not be more than 2 times Equity post buyback which is the only thing SEBi wants to see.

    ADANI Port has approved the proposal for the buy-back by the Company of up to 3,92,00,000 Equity Shares (being 1.89% of the total paid-up Equity Share Capital of the Company) from the equity shareholders of the Company as on June 21, 2019 (the “Record Date”) (“Eligible Shareholders”).

    (“Buy-Back”) at a price of Rs. 500 (Rupees Five Hundred Rupees only) per Equity Share (the “Buy-Back Offer Price”), for an aggregate amount not exceeding Rs. 1,960 Crores (Rupees One Thousand Nine Hundred Sixty Crores only), (the “Maximum Buy-Back Size”, being 9.94% of the total paid-up Equity Share Capital and free reserves of the Company as per the audited standalone financial statement as at March 31, 2019) from the Eligible Shareholders of the Company on a proportionate basis through Tender Offer route.

      Can, but it is always a risky proposition.

    (i) As on 31.03.2019. the company has paid- up capital and reserves close to 24000 Cr.

    (ii) The maximum size of the buyback as per SEBI guidelines in 25% of paid-up capital and free reserves.

    (iii) So that comes out to be 6000 Cr. Now let us see how much of this chunk they want to give it back to shareholders. Do not expect IT companies like buyback where requirements of cash are less unless they are doing any acquisition.

    (iv) If the buyback size is less than 10%, then no approval of shareholders is required. In such buyback, the process gets completed very fast. The company announced the record date on the day of announcing of buyback itself. We have seen this in case of Govt PSU companies buyback.

    (v) One more condition of Post-buyback the D/E can’t be more than 2. The D/E currently stands at 0.92 based on 2018-19 Balance Sheet,