IOC Buyback 2018

With a 33,000-plus work-force, extensive refining, distribution & marketing infrastructure and advanced R&D facilities, lndianOil play a significant role in fuelling the socio-economic development of the country. With a mandate to ensure India’s energy security and self-sufficiency in refining & marketing of petroleum products, lndianOil has in the past six decades provided energy access to millions of people across the length and breadth of the country through its ever-expanding network of over 47,800 customer touch-points.

With a turnover of Rs. 5,06,428 crore and a net profit of Rs. 21,346 crore in 2017-18, and a market capitalization of 1,71,511 crore, lndianOil is recognized as one of India’s most valuable companies.

The Company continues to be the largest contributor to the national exchequer in the form of duties and taxes. During the year 2017-18, Rs. 1,90,670 crore was paid to the exchequer as against Rs. 1,79,014 crore paid in the previous year.

A> Refineries

lndianOil continues to set up state-of-the-art refineries across the country to meet the growing demand for petroleum products. As on 31st March 2018, the Company owns 11 (including two of its subsidiary) of India’s 23 refineries with a combined refining capacity of 80.70 MMTPA, accounting for 33% of domestic refining capacity.

B> Pipeline

lndianOil operates a network of 13,400 km of cross-country pipelines for transporting crude oil, refined petroleum products, and natural gas, with a cumulative throughput capacity of 94.79 MMTPA of oil and 9.5 MMSCMD of gas. During the year, 543 km of new pipeline sections were commissioned.

Currently, lndianOil operates six crude oil tank-farms, with individual tank capacities ranging from 30,000 kilolitres (kl) to 85,000 kl, for smooth onward transport to refineries through pipelines.

C> Marketing- 

Keeping all parts of the vast nation well supplied with essential petroleum products is a 24/7 commitment from lndianOil People. During the year, lndianOil continued its dominance in the domestic market with a market share of over 44%, covering the entire range of petroleum products from LPG, petrol, diesel, CNG, aviation fuels, lubricants, naphtha, furnace oil, specialty products, etc. The marketing and distribution network was expanded to over 47,800 customer touch points during the year.

 

Buy Back Offer Deal:

Buyback Type: Tender offer
Buyback Record Date: Dec 25 2018
Buyback Opening Date: Jan 22 2019
Buyback Closing Date: Feb 04 2019
Buyback Offer Amount: ₹ 4435 Cr
Date of Board Meeting approving the proposal: Dec 13 2018
Date of Public Announcement: Dec 13 2018
Buyback Offer Size: 3.06%
Buyback Number of Shares: 29,76,51,006
Buyback Price: ₹ 149 Per Equity Share

Details of Buyback:

(1) Buyback of the fully paid equity shares of the Company of the face value of Rs.10/- each Buyback of equity shares of the Company not exceeding 29,76,51,006 (Twenty Nine Crore Seventy Six lakhs Fifty One thousand and Six only) equity shares being approximately 3.06 % of the total paid up equity share capital of the company at a price of Rs 149/- ( Rupees One Hundred Forty Nine only) per equity share payable in cash for an aggregate consideration not exceeding Rs 4435 Crore (Rupees Four Thousand Four Hundred Thirty Five Crore). (2) Declaration of Interim Dividend on the equity shares of the Company for the financial year 2018-19 The company has declared an Interim Dividend of 67.5% i.e. Rs. 6.75 per equity share of face value of Rs.10/- each. (3) The record date for Buyback as well as for Interim Dividend Pursuant to regulation 42(2) of the listing regulations, it is further notified that the Company has fixed Tuesday, the 25th December 2018 as the record date.

Salient financial parameters:

Year Revenue(Cr) PAT(Cr) OPM NPM EPS
2016 3,49,498.59 11,242.20 6.68% 3% 23.12
2017 3,64,142.77 19,106.40 9.80% 5% 20.17
2018 4,27,453.32 21,346.12 10% 5% 22.17
IZ Financial Review 1. The Company has shown Revenue growth of 10.61% in the last 3 years. 2. The Company's PAT has grown almost doubles up in the last 3 years, however, due to equity dilution the effect is not visible in EPS. 3. The Company has shown good improvement in both OPM and NPM overs the 3 years. 4. AT CMP of 137, the P/E is 6.27.

How to Participate in buyback?

1. Firstly, to be eligible for the buyback the investor should have shares of IOC Buyback 2018 in demat or physical form as on the record date [25.12.2018]. 2. Once you have shares in demat, you can participate in the buyback process which is opening from [ 22.01.2019 to 04.02.2019] by selling your shares through your broker on NSE or BSE. 3. Then on [12.02.2019], 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  1342 Shares at CMP of Rs.137[2,00,000/149=1342)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,83,892 1,83,892 1,83,892 1,83,892
No. of Shares buyback 442 671 1006 1342
BuyBack Profit 5304 8052 12072 16104
Profit 3% 4% 7% 9%

Recommendation:

Review and Recommendation of Indian Oil Corporation (IOC) Buyback 2018 by IZ team is: 4/10 Fair: 1-5 Good:5-7 Excellent: 7-10

    Final Analysis of Indian Oil 2018 ( Return Analysis)

    1. Buyback Announcement date: 13.12.2018—– Share Price was 137.

    2. 1342 Shares bought at Rs. 137 means an investment of 1,83,892.

    3. Retail Acceptance Ratio was 100%. i.e. out of 1342 shares, 1342 shares have been buyback by the company. Profit on Accepted Shares= 16,104

    4. The final Accepted Shares were taken back on 12.02.2019.

    5. Overall we can say a profit of 16,104 on an investment of 1,83,892 in 2 months.

    Total shares reserved for Retail were close to 4.35 Cr and till date, total shares tendered in Individual Category( Retail + General) is around 4.12 Cr.

    So Expect 90-95% AR in IOC.

    Nacho!!!

    I trade via Idirect. I dont hold any stock as on date of L & T and posing to buy stock tomorrow ( Feb 1st ) .
    1. Will I be eligible to participate in buyback offer by L & T?
    2. How is record date relevant to buyback process ?

    Assuming record date as 25th Dec, does that mean shareholder should be already holding position as on record date and any stock bought on or after record date would not eligible for buyback ? Is my guess correct ? Earliest revert is appreciated 🙂

      First of all L&T buyback is withdrawn due to some regulatory issues.

      Second query, to be eligible for buyback the investor should hold shares in demat form as on Record date.

      Indian Oil Buyback is still opened till 4 Feb 2019. Please wait for final acceptance ratio.

      Hos- IOC have high chances of 100% buyback acceptance….

      Entitlement ratio only 38%..still?..

      Any idea?

    I have purchased 200 share of ioc before record date (18-11-2018).
    then i have sold it in January 10.

    Again i have bought 200 shares on January 21.
    Then i will be eligible for buyback or not?

    Ioc buy back rate rs149
    date 22Jan to 04feb
    Ongc buy back rate Rs 159
    date 29Jan to 8feb

    I bought IOC On Dec 21 , Record Date is 25th December

    But still I didn’t receive tender letter form to my mail Id,

    Please can some one tell me , am I eligible for buyback
    If yes, Why I didn’t receive any mail regarding tender form

      I think you can provide more than your entitlement in your tender form. They may purchase all that you offer if others have not tendered and they are still able to purchase the additional tendered by others as long as they are able to retain with in the limits of the buyback offer.

      That’s right. Entitle share are sure shot. May additional, anybody doesn’t know how much will tender.

      I have received letter for 29 shares out of 80. If I want to tender the 29 shares what should I do? Is there an online option to tender my shares or should I fill in the acceptance form and post it to them?

      This is the first time I am thinking of participating in a buyback and I am not sure what to do

        The company will announce a buyback window which remains open for 12 working days. You can tender shares either by filing offline forms or online. Some broker provide platform via trading account to tender shares online. For example in Zerodha one can tender shares online.

    When will the buyback offer be sent to shareholders? is it after an AGM to approve this proposal or has it already been sent and maybe I’ve not received it yet?

      Shortly we will get the Letter of Offer. There is no requirement of shareholders approval as the size of the buyback was less than 10%.

        Thank you Market Wizard. Is this a good time to buy IOC? I have few shares prior to record date which I had bought when the oil stocks crashed a couple of months back. I will tender them in buyback but want to increase my holdings by buying additional shares now which are less than buyback price? Will the buyback cause prices to fall further in case it’s better to wait till buyback is completed. Any thoughts on long term potential of IOC.

      I’ve purchased IOC shares on 21st December 2018 and the shares were available in my demat account on the same day. But I haven’t received the dividend yet. Will I receive the dividend or not?

        You will not get the dividend. The Record date was 25.12.2018. There was two holiday between 21.12.2018 to 25.12.2018.

    Hi,
    Can anyone tell me how dividends are paid by IOC? Are they directly deposited in demet account/bank account or will receive a check?

    Dear Sir,
    I have 3000 shares (4.15lakh) from IOCL it was perched before announcements of buy back offer. Should I eligible for buy back amount.
    Please reply sir
    Rahul Mondal

    Anyone tell me the buyback procidure and last date of purchase IOC share for perticipate buyback ?

      The last date is over now. You can’t participate in the buyback.

    I think acceptance ratio will be in upper side because peoples are not getting the stock n lower level

    Can anyone help me understand what is interim dividend and how will I receive in case of IOC?

      The interim dividend is usually declared during interim financial statements. In case of IOC if you hold shares in your demat account on Record date i.e.25.12.2018 then you will get the dividend. So you should buy shares on or before 20.12.2018 to become eligible because shares are credited in T+2 days.

      20.12.2018( T+0)
      21.12.2018 ( T+1)
      22.12.2018( Holiday)
      23.12.2018( Holiday)
      24.12.2018( T+2)
      25.12.2018( Holiday)

    IOC heading towards buyback price. With Crude going down day by day . Ache Din are waiting for Oil Marketing companies.

      Not now. It has already moved rs.6 up from the recommended date.

      Good to see analysts taking cognizance of the fact that buying happening till record date can change the entitlement s and the return expectations.

    Please address my query if anyone can help me out…

    I have 2000 shares of IOC which are of worth more than 2,00,000/- (prescribed for being a small investor), Please tell me if I can tender the shares only worth upto 200000/- and can be counted under small investor category or should I sell the shares before the record date so as to bring down my holding below 2,00,000/- to come under small investor category???

      IOC may fall 5% because it will go ex dividend as well on the record date. But since oil is at low price company may get benefit once subsidy burden is taken off.

      At CMP, the Yes Bank is good investment pick considering it is available at a cheap valuation as compared to its peers. Once the dust settles down, it should give a good return.

      Disclaimer: I am invested in Yes Bank.

          Buy in SIP mode. The best is to buy around 160-170 levels. However, as things are improving at Yes Bank in relation to corporate governance issues the share price of 160 will come or not is questionable. So I would recommend that if you want to buy 100 shares, then buy 25 @180, 25@175, 25@170 and 25@165. So that Average comes around 172 which I feel is a good price.

          Disclaimer: I am invested in Yes Bank.

      Yes, but on Record Date, if the price goes above 149 then you will not be count under Retail Category, however, you can still tender your shares under General Category.

    Record date 25th december for Interim dividend .
    Can I sell share after record date ?
    Am I eligible for Interim dividend ?

    If anyone answer please tell .

      EMKAY Global is Accepting close to 87% of Acceptance Ratio. Please read the report below.

      https://d2un9pqbzgw43g.cloudfront.net/main/IOC-Buyback_131218-1.pdf

      In my point of view, the Acceptance Ratio of more than 85% is possible only when we consider there no downside in the stock and that is possible when crude remains subdued at the level of $60-$65. However, if crude goes above $70 and election nearby the Govt may push the burden on OIL companies to lure voters and in that case, the AR may not be more than 50%.

    I think we should buy this share at CMP considering dividend of 6.75, the CMP would be close to 133 and from there an upside of 12%.

    At Current Market of 137, the P/E is close to 6.27. The Price has already corrected a lot in from Jan 2018 when it was close to 208 levels. The Price tanked to 105 when govt announced the burden of Rs.1 to all Oil companies when Crude was rising and I think that is the bottom of the stock. The downside is quite less from the current levels.

    As far as overall Market is concerned, not much downside is expected in the Market going forward ( except some minor correction) as all the big events like Election are over, 90 days truce in a tariff war, Crude fell more than 25%, the recent IIP and CPI data shows marked improvement, plus govt will try to woo citizens of India before the election.

    So start buying from the current levels in the market your favourite shares which you were waiting from the last 6 months and ready for Pre- election and pre-budget rally in the market.

    IOC BUYBACK update

    Dividend Rs.6.75 per share
    BUYBACK at rs.149
    3.06% equity

    Size 4435 crores

    *Record date 25 December*

    Total No. of Shares Buyback ——————– 29,76,51,006
    Reserved for Small shareholders ————— 4,46,47,650
    Small shareholders holding as on 30 Sep — 28,73,79,529
    Return approx. 13.5% as per CMP 137.20 (Including dividend Rs. 6.75)

    As per 30 Sep holding entitlement around 16%

    **** Actual entitlement depends as per holding on record date

    Please correct below lines in ioc buyback. Please give your final recommendation about ioc not of techno

    Recommendation:
    Review and Recommendation of Techno Electric & Engineering Buyback 2018 by IZ team is: 4/10
    Fair: 1-5
    Good:5-7
    Excellent: 7-10*