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 Opening Date: Mar 01 2019
Buyback Closing Date: Mar 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 [ 01.03.2019 to 15.03.2019 ] by selling your shares through your broker on NSE or BSE. 3. Then on [ 22.03.2019 ], 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 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 ]

    Coal india dividend declared Rs 5.85 per share. Those who buy till march 21.are entitled to get it.

    CMP is 244 but Bids for buyback @235 have reached to more than 100% and 4 days to go, dividend will be declared on 14.03.19,
    Now buy, hold or sell?

      Better to exit at CMP if you have bought for the purpose of Buyback.

    @marketwizard,

    I have already sold shares at 240. Was thinking to buy again at 231 and tender in buyback.

    Hi MW,

    I had 500 shares at the time of record date, can I tender more than 500 (say 800) shares in buyback?

    Also would you recommend to buy more at 231?

      1. You can’t tender more than 500 Shares.

      2. Why didn’t you sell the Coal India shares when it was 242. Why did you wait for buyback at 235?

    Investors can now sell at-least 70% of their shares today why can not sell 100 % if sell 100 what happen

    Please keep an eye on Coal India, if the price fall below 230, grab with both the hand.

    Coal India Cash and March future difference is 6 Rs. Dividend around the corner.

    Strange……
    Buyback price 235…………….. current CMP 242
    still individuals tendering shares to buyback for Rs. 235
    At 12.00pm tendered shares by Individuals —– 121511
    At 3.00pm tendered shares by Individuals —– 165370

    Share price of Coal India may go above 235 after buyback 15.03.19 like NMDC

    Investors can now sell at-least 70% of their shares today who bought for Buyback. If the price falls around 225 level then they can again buy and tender their shares.

      Investors can now sell at-least 70% of their shares today why can not sell 100 % ?

        That message when the share price was around 230. Now you can sell all your shares.

    Coal India at 229. Those who bought between 205-215 levels just for the sake of buyback must exit at least 50-60% position of their Shares.. So AR above 50 % is expected in coal India if price remains above 230 for some more days

      Once again more than 75,000 people bought the shares with the sole purpose of tendering in the buyback. There were 6,000,00 shareholders upto 2lakh shares in Dec 2018 which increased to 6,720,00. since size of Coal India buyback is one fourth of ONGC and IOC. Don’t expect much shares to be accepted from entitlement. Lets see. The other thing is when will board meed for March 2019 dividend when will the record date of interim dividend be. Hopefully it should be after the settlement of buyback is done.

    I had 3000 shares on record date, will I be considered as retail investor if I tender only 851? I am assuming acceptance ratio will be more in retail category , not sure if i’ll be considered as one though.

    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.