Coal India Buyback 2019

(i) Coal India Limited (CIL) state-owned coal mining corporation came into being in November 1975 With its normal production of 79 million tonnes (MT) in the year of its establishment.

(ii) Coal India Limited is today the world’s largest coal producers. CIL is a top body spreading through 8 mining areas, 7 fully owned coal producer subsidiaries and 1 mining scheme and consulting company spread across 8 provincial states of India.

(iii) CIL manages 200 other establishments such as workshops, hospitals. In addition, there are 26 technical and management training institutes and 102 vocational training institutes. Indian Institute of Coal Management (IICM), a state-of-the-art management training as ‘Excellent Center’ – is run by India’s largest corporate training institute – CIL and conducts multi-disciplinary management development programs.

(iv) CIL is a Maharatna Company – the privilege of the Government of India for the expansion of state-owned enterprises and emerging as a global giant. It is one of the few selective concepts in the category of central public enterprises in the country.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: Feb 15 2019
Buyback Offer Amount: ₹ 1050
Date of Board Meeting approving the proposal: Feb 04 2019
Date of Public Announcement: Feb 04 2019
Buyback Number of Shares: 44680850
FV: 10
Buyback Price: ₹ 235 Per Equity Share

Details of Buyback:

Approved the proposal to the buyback of not exceeding 4,46,80,850 equity shares (representing 0.72% of the total number of equity shares in the paid-up share capital of the Company) at a price of Rs. 235 per equity share (the "Buy Back Offer_Price") payable in cash for an aggregate consideration not exceeding Rs. 1,050 Crore (the "Buyback Offer Size") through " Tender Offer".

How to Participate in buyback?

1. Firstly, to be eligible for the buyback the investor should have shares of Coal India Buyback 2019 in demat or physical form as on the record date [15.02.2019 ]. 2. Once you have shares in demat, you can participate in the buyback process which is opening from [Not Announced Yet] by selling your shares through your broker on NSE or BSE. 3. Then on [Not Announced Yet], 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 851 Shares at CMP of Rs. 222 [2,00,000/235=2040)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,88,936 1,88,936 1,88,936 1,88,936
No. of Shares buyback 280 425 638 851
BuyBack Profit 3640 5525 8294 11063
Profit 2% 3% 4% 6%

Recommendation:

Review and Recommendation of Coal India Limited Buyback 2019 by IZ team is: 2/10 Fair: 1-5 Good: 5-7 Excellent: 7-10 [ The upside from CMP is very less and the size of the buyback is also very small. Nothing is there in the buyback ]

    Those who are eligible for buyback are selling today. Now these investors will wait till the date of announcement of Entitlement ratio and based on that they will buy it again. So next surge in price as far as buyback is concerned will come after the announcement of Letter of Offer.

      Also there will be huge selling pressure because of Bharat 22 also The price might fall to 200 levels 🙂

      Ye hum sahi me kar sakte he kya..
      Me bhi coal India sell karna chahta hu.
      Bad me buy karunga to tender ke liye eligible hu ga ke nahi…..

    Q3FY19

    Revenue- 25,046 Cr
    Profit- 4567 Cr
    EBITDA- 6788 Cr
    Margin- 27.1%

    Suppose if somebody has bought coal India share before at the rate higher than 235 rs… is it worth tendering the shares in buyback ie by the time company credit the amount for the bought shares … rate of coal India will be down

      If you have bought above 235 and you want to get exit from the stock, then it is a golden opportunity to participate in the buyback and tender your shares.

    Expected AR Calculation

    1. Total Shares reserved for Retail Category= 67 Lakh

    2. Total Shares up to 2 lakh as per Dec 2018 Shareholding pattern = 10 Cr

    3. So AR based on this would be = 6.7%.

    Final Acceptance Ratio may be higher as investors are looking less interested in the buyback.

    Current Market Price closing 05.02.2019 is 216, the Buyback Price is 235, that means an upside of 8.79%. The Risk Savy Investors can take participate in the buyback as it is a Govt PSU buyback which will be completed in 1-2 months time easily.

    was expecting a price of 250. really disappointed with the buyback.

    CMP ——— 222.05
    Buyback price ——— 235 (5.90% from CMP)
    Total buyback ———————————————————————— 4,46,80,851 approx.
    Reserved for small shareholders ————————————————- 67,02,127 approx.
    shares holding by small shareholders as on 30th Sep 2018 ——— 9,63,40,492

    sir maine 7 account me 5600 share aaj by kiya he by back ke hisab se 223 me by back kitna percantage lenge aur me kya karu pls advice

    Sir I am holding 180 CIL shares at Rs252/average.Shall I accumulate further for buyback.pl advice.Thank you

    *Coal India likely buyback size Rs 1,065 crore* and nearly 72 percent of the amount will go to the government.

    The buy back exercise will take place in two steps, the sources said. “First, Mahanadi Coalfields Ltd, South Eastern Coalfields Ltd and Northern Coalfields Ltd (all CIL subsidiaries) will buy back their shares worth Rs 355 crore each from the parent,” one of the sources said.

    Thereafter, Coal India will buyback own shares from shareholders out of its free reserves worth Rs 1,065 crore.

        Yes. But on SIP mode as we do not know at what price the buyback will come. Maybe it can come at last time OFS price of 255.