Indian Energy Exchange Limited Buyback 2018

INDIAN ENERGY EXCHANGE LIMITED (IEX) is India’s premier power trading platform. Providing an automated platform for physical delivery of electricity, IEX enables efficient price discovery and offers participants the opportunity to trade in a variety of energy products.

The exchange platform increases the accessibility and transparency of the power market in India and enhances the speed and efficiency of trade execution.

Today, more than 6200 participants are registered on the exchange and are located across utilities from 29 States, 5 Union Territories (UTs). Over 4,500 registered participants were eligible to trade electricity contracts and over 4,100 registered participants were eligible to trade RECs, as of March 2018. Out of participants registered to trade electricity contacts include 54 distribution companies, over 480 electricity generators, and over 4,000 open access consumers.

As of March 2018 in addition to participants who traded electricity contracts, participants registered to trade RECs included over 1,050 renewable energy generators and over 3,000 industry and corporate customers. The benefiting open access consumers belong to various industries such as metal, food processing, textile, cement, ceramic, chemicals, automobiles, information technology industries, institutional, housing, and real estate and commercial entities.

In August 2016, IEX received three ISO Certifications – ISO 9001:2008 for quality management, ISO 27001:2013 for Information security management and ISO 14001:2004 for environmental management.

Buy Back Offer Deal:

Buyback Type: Tender offer
Buyback Offer Amount: ₹ 69 Cr
Date of Board Meeting approving the proposal: Dec 20 2018
Date of Public Announcement: Dec 20 2018
Buyback Offer Size: 1.23%
Buyback Number of Shares: 3,729,729
FV: 1
Buyback Price: ₹ 185 Per Equity Share

Details of Buyback:

Approved the proposal to the buyback of its fully paid-up equity shares of Re. 1 each not exceeding 3,729,729  equity shares of the Company (representing 1.23% of the total number of equity shares in the paid-up share capital of the Company) at a maximum price of Rs. 185/-  per equity share payable in cash aggregating to the total consideration not exceeding Rs. 69,00,00,000/-  via " Tender Route " subject to the approval of the shareholders of the Company, by way of a special resolution through postal ballot (including e-voting).

How to Participate in buyback?

1. Firstly, to be eligible for the buyback the investor should have shares of Indian Energy Exchange Limited Buyback 2018Buyback 2018 in demat or physical form as on the record date [Not Announced Yet]. 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 1081 Shares at CMP of Rs. 167 [2,00,000/167=1081]
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,80,540 1,80,540 1,80,540 1,80,540
No. of Shares buyback 356 540 810 1081
BuyBack Profit 6408 9720 14580 19458
Profit 4% 5% 8% 11%

Recommendation:

Review and Recommendation of Indian Energy Exchange Limited Buyback 2018 Buyback by IZ team is: 2/10 Fair: 1-5 Good:5-7 Excellent: 7-10 [ Acceptance Ratio: 5-10%]

    On IEX buyback – The Company has engaged the services of M/s Karvy Fintech Private Limited (formerly, Karvy Computershare Private Limited) for the purpose of providing e-voting facility to all the members of the Company. The voting through postal ballot and through e-voting shall commence from Monday December 31, 2018 (9:00 a.m. IST) and shall end on Tuesday, January 29, 2019 (5:00 p.m. IST).

    It is looking like that management is doing this buyback in place of dividend to avoid taxes.

    Individual share capital upto Rs. 2 Lacs = 15,63,854 ( As on 30.09.2018)

    The Stock got split in October from FV=10 to 1

    That means effective shares would be 1,56,38,540

    Retail Quota in buyback= ~5 .59 lakhs

    Entitlement would be= 3.57%.

    Last 3 years Revenue Growth= 13.1%

    Last 3 years PAT Growth= 14.46%

    Last 3 years EPS Growth= 13.76%( Equity Dilution in FY18)

    The Company’s major Expense is Employees benefit.

    The company has clocked a revenue of 256 Cr in FY18. In the first 6 Months of FY19, the Revenue stands at 133 Cr.

    PAT of FY18= 131 Cr

    EPS of FY18= 44

    The Share got Split on 19.10.2018 from FV=10 to FV=1.

    So Effective EPS post-split would be 4.4.

    P/E= 37.27