MOIL Buyback 2021

MOIL is a Schedule “A” Miniratna Category-I Company. It was originally incorporated as Manganese Ore (India) Limited in the year 1962. Subsequently, a name of the Company was changed from Manganese Ore (India) Limited to MOIL Limited during the financial year 2010-11.
MOIL was originally set up in the year 1896 as Central Province Prospecting Syndicate which was later renamed as Central Provinces Manganese Ore Company Limited (CPMO), a British Company incorporated in the UK. In 1962, as a result of an agreement between the Government of India and CPMO, the assets of the latter were taken over by the Government and MOIL was formed with 51% capital held between the Govt. of India and the State Governments of Maharashtra and Madhya Pradesh and the balance 49% by CPMO. It was in 1977, the balance 49% shareholding was acquired from CPMO and MOIL became a 100% Government Company under the administrative control of the Ministry of Steel.
MOIL Ltd(BSE: 533286 | NSE: MOIL ) Board has approved a proposal for buyback of up to 87.66 lakh shares at Rs 240 per share, aggregating Rs 210.4 cr which is 3.29% of a total number of paid-up equity shares.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Offer Amount: ₹ 693 Crores
Date of Board Meeting approving the proposal: Nov 10 2021
Date of Public Announcement: Nov 10 2021
Buyback Offer Size: 14.23%
Buyback Number of Shares: 33,804,878
Price Type: Tender offer
FV: 10
Buyback Price: ₹ 205 Per Equity Share

Details of Buyback:

Board has approved the proposal to buyback MOIL of not exceeding 3,38,42,668 equity shares of face value of Rs.10/- each of the Company (representing 14.26% of the total number of fully paid-up equity shares in the paid-up share capital of the Company) at a price of Rs.205/- per equity share (the “Buyback Offer Price”) payable in cash for an aggregate consideration not exceeding Rs. 693 Crores (the “Buyback Offer Size”), being 25% of the aggregate of fully paid-up share capital and free-reserves.

Salient financial parameters:

Particulars (in Cr) Mar 2016 Mar 2017 Mar 2018 Mar 2019 Mar 2020 Mar 2021
Sales + 632 978 1,314 1,438 1,034 1,172
Expenses + 562 679 781 842 779 885
Operating Profit 71 298 533 596 256 287
OPM % 11% 31% 41% 41% 25% 24%
Other Income 252 221 178 191 181 52
Interest 0 3 0 0 0 0
Depreciation 52 55 62 67 96 99
Profit before tax 270 462 648 720 340 240
Source:Screener

How to Participate in buyback?

1. Firstly to be eligible for the buyback the investor should have shares of MOIL Buyback 2021 in demat or physical form as on record date [Not Announced] 2. Once you have shares in demat, you can participate in the buyback process which is opening from [Not Announced] by selling your shares through your broker on NSE or BSE. 3. Then on [Not Announced] 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 975 Share at CMP of Rs.177 [2,00,000/205=975)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,72,682 1,72,682 1,72,682 1,72,682
No. of Shares buyback 321 487 731 975
BuyBack Profit 8988 13636 20468 27300
Profit% 6.29% 7.89% 11.8% 15.8%

Recommendation:

Review and Recommendation of MOIL Buyback 2021 by IZ team is: 6/10 Size of buyback is 693 Crores and total shares reserved for retail clients are ~50 lac. So, expected AR in Retail is around 30-40%. However, this figure will increase as price moves towards buyback price.

52 Comments

    For James Warren Tea
    Thanks SRK Sir! Details are of great help.
    I would wait till the record date is announced. Market is already down… and probably we may get it cheaper..
    What do you Say?

      Sir,
      If the price is stabilised around Rs.245/- to Rs.250/-, we can try our luck with half of our normal investment for each buyback. Size of the buyback is not an attractive one to blindly go for. All the best. Thank you.

    Please open a page for the buyback of James Warren Tea at the earliest for the benefit of the readers. Thank you in anticipation of your prompt response.

          Sir,
          In 2020, the Buyback price was Rs.214/-and the Market price was around Rs. 216/-. Hence, many investors have not tendered their holdings for the buyback. That’s why 100% AR. The size of the buyback was also 17.4 lakh shares.
          Coming to the current buyback, the size of the buyback is 8.4 lakh shares only. Moreover, the difference between the CMP (Rs.254/-) and the Buyback price ( Rs.295/-) is also not that much attractive. If the shares are available at around Rs.245/-, one can proceed further to purchase the shares for the buyback. All the best n good luck. Thank you.

            Rs.214/- n Rs 216/- may please be read as Rs. 114/- n Rs.116/- respectively. Sorry for not checking before posting. Thank you.

              Thanks SRK Sir! Details are of great help.
              I would wait till the record date is announced. Market is already down… and probably we may get it cheaper..
              What do you Say?

        Sir,
        In 2019 the Buyback price was Rs.215/-and the Market price was around between Rs. 212/- and Rs. 215/-. Hence, many investors have not tendered their holdings for the buyback. That’s why 100% AR. The size of the buyback was also 23.25 lakh shares.

          Rs.215/- n Rs 212 may please be read as Rs. 115/- n Rs.112/- respectively. Sorry for not checking before posting. Thank you.

    Is AR to be applied seperately for non retail & retail or AR to be calculated based on no. of shares not surrendered being distributed between retail and non reail combinedly. kindly clarify how AR is arrived from ER.

      Prashant ji,
      Its best to read postal ballot notice which clarifies all.
      But still AR for Small share holders and General are calculated separately, with less subscription provided in same category only.

    MOIL
    Please refer Postal ballot for MOIL, where GOI is participating for retaining its 51% i.e. nearly with 4-5%, while Government of MP would participate with 1-2%.
    But here I believe due to large equity, retail is still better..

    Kindly suggest

      Sir,
      I also believe that in this case, retail category is more beneficial as the AR will be hopefully more than the other category. Thank you.

      Fifteen per cent of the number of securities which the company proposes to buy back or the number of securities entitled as per their shareholding, whichever is higher, shall be reserved for small shareholders,” says Securities and Exchange Board of India (Buyback of Securities) (Amendment) Regulations, 2012.

    FOR NUCLEUS
    Dear Team,

    Nucleus itself has done buyback in 2017, where the promoters have not participated and AR for retails and general was 58.61% for small share holders and 52.62% for others.
    At that time, Promoters share was 60%, while this time its 68%. Also last time total buyback % was 10.32%, while this time it is 7.81%.

    Also reserved / small category is very different from the Share holder statement, where the holder of capital of Rs 2L is shown i.e. if the share face value is Rs 10/- then upto 20000 nos shares.
    While in Buyback calculation, the small share holders are of actual Rs 2L approx 335 shares only. So Actual small share holders would be less.
    I am still confused and bought more than 2L in 2 accounts and if the price increases would sell to be eligible for small share holder.

    Please add your comments

      Sumit Jain ji,
      Though I am not having more knowledge than you, yet I humbly submit that your action already taken is more appropriate n beneficial. I believe that there is no need to sell the shares to become eligible for small shareholder category. In Chittorgarh Team site also, experts are of the opinion that it’s more beneficial to other than the small shareholder category as the AR will be more in this category due to non/ negligible participation of the promoters in the buyback.
      Of course, in my two family accounts, share holding pattern as already existing is different from one another ( less than worth two lakhs in one account and more than worth two lakhs in the other account). I don’t want to change. Thank you.

      HF ji,
      You can buy at the CMP of around Rs. 172/-. ER is expected to be around 10% for retail and final AR is around 35%.

    Great Girish ji,
    Learned members,
    Kindly suggest any other earlier tender buyback, where promoter has not participated. for been taken as reference. Thanks

    Do you know if promoters will participate? They are Govt.
    If not, this one is also ripe for non retail. Can you please validate my calculation?

    (all numbers are in approximation)
    Total shares 237327879
    Promoters 152729899
    Non promoters 84597980
    Promoters willing to tender 0 (this is a big question if they will participate)
    Total possible Tender shares 84597980

    Buyback Number of Shares: 33,804,878

    Retail share quota (15%) Total retail shareholders ER
    5,070,732 31,190,118 16%

    Non Retail buyback shares Total non-retail shareholders (excluding govt) ER – Non Retail
    28,734,146 53,407,862 54%

      Sir,
      Please intimate whether you are referring to MOIL or NUCLEUS so that it can be reviewed, analysed and appropriate decision taken. Thank you.

        It was pointed out to me that i have to take 15% or actual for retail. Its approx 18% in this case. Hypothesis still remain the same. A bit thanks to Sumit to bring this to all of us in first place.

        Total shares = 29040724
        Promoters = 19627866
        Non promoters = 9412683
        Promoters willing to tender = 107926
        Total possible Tender shares = 9520609 (Non promoters+promoters willing to tender)

        For retail

        Total buyback shares= 22,67,000
        Retail quota= 4,15,843 (actual number)
        Total potential retail shareholders= 53,27,000
        Acceptance Possibility (Retail quota/total potential retail shareholders)= 8%

        For non Retail

        Non Retail buyback shares (22,67,000-4,15,843)= 18,51,157
        Total potential non retail shareholders willing to tender= 41,93,609
        Acceptance Possibility = 44%

        44% is still very good. In reality it should be much much higher.
        Current arbitrage is 18% ( buyback price= 700 CMP= 590)

        Calculation for nucleus, in MOIL, little confusing then why not open separate page for Nucleus. Admin pl open

      Above analysis is for Nucleus
      This below analysis is for MOIL if Govt will not participate. However i looked as many part cases, they do participate.

      — analysis if govt is not participating in MOIL—>>

      (all numbers are in approximation)
      Total shares 237327879
      Promoters 152729899
      Non promoters 84597980
      Promoters willing to tender 0 (this is a big question if they will participate)
      Total possible Tender shares 84597980

      Buyback Number of Shares: 33,804,878

      Retail share quota (15%) Total retail shareholders ER
      5,070,732 31,190,118 16%

      Non Retail buyback shares Total non-retail shareholders (excluding govt) ER – Non Retail
      28,734,146 53,407,862 54%

        Please refer Postal ballot for MOIL, where GOI is participating for retaining its 51% i.e. nearly with 4-5%, while Government of MP would participate with 1-2%.
        But here I believe due to large equity, retail is still better..

        Kindly suggest

    Nucleus software record date 27 nov 21 n buyback @700 seems good .comments of experts please

      Hi Girish , SiVA RK ji, Paliwal Sahib, and others,
      Following is my analysis for Nucleus software:
      Total Share : 2,90,40,724
      Shares with promoters : 1,96,27,866
      Shares other than promoters : 94,12,683
      Shares willing to tender / participate by promoter group: 1,07,926 only
      Total Shares possible to be tenders ~ 95 L
      Shares to be buy back – 22,67,400 ~ 22.6 L
      Isn’t it shows 100% acceptance and better options outside retail..
      For Retail , total nos of share =53.27L, Reserved 15% quota = 8 L shares ER = 15.07%
      Total Unreserved =41.73 L shares, Unreserved 85% = 19.27 ER = 46%

      AM I MISSING SUM THING?

        Jain ji,
        If you don’t mind, can you please enlighten me on the details of the source regarding participation in the Buyback by the promoter group as somehow I might have missed the news. Please don’t mistake me. It’s only a request in the academic interest. Thank you.

          Dear SRK ji,
          You have always helped, so obviously no second thoughts .. Please refer Postal ballot notice, also available at BSE website, Link :
          https://www.bseindia.com/xml-data/corpfiling/AttachHis/ef2a5f47-d859-4d47-821f-11687cd2d88a.pdf

          refer page 12 “Intention of Promoter and Promoter Group and persons in control of the Company to participate in the Buyback” Only 3 promoters with 108710, shares have shown their intention to participate.
          While remaining 8 holding around all of promoter shares have shown their intention NOT to participate. As from postal ballot notice:
          “The following persons belonging to the Promoter and Promoter Group entities and persons in control of the Company have, vide their letters dated September 22, 2021, September 23, 2021 and September 24, 2021, expressed their intention to not to participate in the Buyback”

          IT APPEARS TOO GOOD TO BE TRUE.
          SRK ji please check and confirm.

          Dear SRK Sir ji,
          You have always helped, so obviously no second thoughts .. Please refer Postal ballot notice, also available at BSE website, Pl refer page 12 “Intention of Promoter and Promoter Group and persons in control of the Company to participate in the Buyback” Only 3 promoters with 108710, shares have shown their intention to participate.
          While remaining 8 holding around all of promoter shares have shown their intention NOT to participate. As from postal ballot notice:
          “The following persons belonging to the Promoter and Promoter Group entities and persons in control of the Company have, vide their letters dated September 22, 2021, September 23, 2021 and September 24, 2021, expressed their intention to not to participate in the Buyback”

          IT APPEARS TOO GOOD TO BE TRUE.
          SRK ji please check and confirm.

            Sir,
            Thank you very much for your kindness in sharing the information. So AR will be very good in non retail category. I will definitely purchase more to be categorised in non retail group, if my pocket permits. Please keep sharing the updates n helping us. Thank you n all the best in all your deeds.

              Sir,
              I am also confused for retail / General, as not clear what would be the total nos of shares while considering category.
              Also non retail has investors like Dolly Khanna and Arun Jain, who would definitely tender all shares so more competition. While retail category normally apply less.

                Sir,

                As defined under Regulation 2(i)(n) of the Buyback Regulations, a “Small Shareholder” is a Shareholder who holds Equity Shares whose market value, on the
                basis of closing price on Stock Exchanges as on Record Date, is not more than ₹ 200,000/- (Rupees two hundred thousand only). As on the Record Date, suppose the volume of Equity Shares traded on BSE was 1000 Equity shares and on NSE was 1500 Equity Shares. Accordingly, NSE, being the stock exchange with highest trading volume, the closing price was suppose ₹ 100 and hence all Shareholders holding not more than 2000 Equity Shares as on the Record Date are classified as ‘Small Shareholders’for the purpose of the Buyback Offer…..
                Hope it is clear now…. Thank you.

                  Yes sir, I am aware of Small shareholder category.
                  But was referring to the classification used during tendering %age by company.
                  Company can take eligible %age for small holder from total shares or from possible tenderable share.
                  For sure here, the quota of 15% would not be there as it would be less than the total %age which is 18%..
                  Pl check if you get some input

                    Sir,
                    Wholeheartedly Very sorry for my inability to understand your query and for underestimating your knowledge. I humbly submit that somehow I am a bit concerned about the issue. Thank you.

      I had already collected 300 plus shares and will decide on 24 nov to go above 2 lac or below .If situation get changed then please update here to decide me and others .thanks in advance

        Great Girish ji,
        Learned members,
        Kindly suggest any other earlier tender buyback, where promoter has not participated. for been taken as reference. Thanks

        Sir,
        Please update on 24th morning so that it can be reviewed, analysed and appropriate decision taken. Thank you.

    I appreciate the team concerned for their quick consideration for adding the buyback of MOIL. A good opportunity to grab. In the first phase, I have purchased altogether 550 shares for our two accounts at the average price of Rs. 156.50. AR is likely to be around 60% as the margin between the CMP and the Buyback price is not that much and the size of the buyback is considered good. Thank you.

      Hi SivaRK,
      You got very good rate of Rs 156.50. I have bought around Rs 177/- . Hopefully would still get good profit and >80% AR.
      Anymore Buyback in offering…
      I have unfortunately missed many…

        Sumit Jain ji,
        I am extremely sorry for the erroneous posting of the rate as Rs. 156.50 instead of the correct purchase price of Rs. 176.50 . All the best to you.

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