Mphasis Buyback offer 2018

Mphasis-buyback-offer-2018
Mphasis
(BSE: 526299; NSE: MPHASIS) applies next-generation technology to help enterprises transform businesses globally. Customer centricity is foundational to Mphasis and is reflected in the Mphasis’ Front2Back™ Transformation approach. Front2Back™ uses the exponential power of the cloud and cognitive to provide hyper-personalized (C = X2C2™ = 1) digital experience to clients and their end customers. Mphasis’ Service Transformation approach helps ‘shrink the core’ through the application of digital technologies across legacy environments within an enterprise, enabling businesses to stay ahead in a changing world. Mphasis’ core reference architectures and tools, speed and innovation with domain expertise and specialization are key to building strong relationships with marquee clients.

Buy Back Offer Deal:

Buyback Type: Tender offer
Buyback Record Date: Oct 25 2018
Buyback Offer Amount: ₹ 988.275 Cr
Date of Board Meeting approving the proposal: Aug 07 2018
Date of Public Announcement: Aug 07 2018
Buyback Offer Size: 3.79%
Buyback Number of Shares: 7,320,555
FV: 10
Buyback Price: ₹ 1350 Per Equity Share

Details of Buyback:

The Company, at its meeting held today on 07.08.2018  which , inter-alia, approved a proposal for Buy-back of equity shares (“Buy-back”) from all the existing shareholders of the Company on a proportionate basis through the “Tender Offer” method in accordance with the provisions of Securities and Exchange Board of India (Buy-Back of Securities) Regulations (the “Buy-back Regulations”) and the Companies Act, 2013 and rules made thereunder at a maximum price of Rs.1,350/- (Rupees One Thousand Three Hundred and Fifty only) per equity share, aggregating to an amount not exceeding Rs.9,882.75 Million (Rupees Nine Thousand Eight Hundred and Eighty Two Million and Seven Fifty Thousands ).

Salient financial parameters:

Year Asset(Cr) Revenue(Cr) PAT(Cr) EPS
2016 7416.84 2909.88 457.14 21.78
2017 7317.09 2945.45 625.01 29.76
2018 6985.34 3114.92 739.89 37.69

How to Participate in buyback?

1. Firstly, to be eligible for the buyback the investor should have shares of Mphasis Buyback offer 2018 in demat or physical form as on record date [25.10.2018]. 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 148 Shares at CMP of Rs.1150[ 2,00,000/1350=148)
Acceptance Ratio 33% 50% 75% 100%
(i) Amount Invested in Buyback 170200 170200 170200 170200
(ii) No. of Shares buyback 48 74 111 148
(iii) BuyBack Profit 9600 14800 22200 29600
(iv) Profit 6% 9% 13% 17%

Recommendation:

Mphasis Buyback offer 2018 Review and Recommendation by InvestorZone team => 6/10  

    But be sure of one thing. Past buyback ratio is no predictor. In navneet, the ratio out today gives just 26% buyback in retail whereas when they came with buyback in 2016, it was 100%.
    In case of mphasis, the buyback size based on no of shares to be bought back, is mich lesser than last time.
    In navneet, the no of shares both time was still the same.
    So, be careful. I have burnt my fingers in navneet and cant help in mphasis since i had already bought at abt 1200. So will stick it out.
    So fresh buying ppl, do be careful unless you consider mphasis as a good long term investment at these prices

      100% Agree with Adesh Jii View Point. Summarize it nicely. I request everyone to invest in Buyback thinking of long-term investment and in between whatever be the Acceptance Ratio will act as an icing on the cake.

      Hi Adarsh and Wizard

      How retail category is decided. It is 200000 devided by market price or buyback price at record date.

      Suppose on 25-Oct, Mphasis market price is 1125 and I am holding 160 shares. Will I be considered in retail category?

        It is calculated on the basis of Market Price on Record date.

    The earlier analysis was for 80% buyback. Assuming all the increase in pd up value (upto 2 lacs) of 40% is by retail investors, even then abt 55% buyback. And assume increase in oct, maybe abt 40% it could remain

      It looks like Buyback Acceptance predicted is already down to 20%. Net Addition is of 1746827 shares in the Retailer Category. At a rate of 1100 per share this is an addition of about 192 crores. The Total Retailer holding at entire 6230428 values at 1100 per share is a about 685 crores.
      Reserved Category is 135 crores. Thus we are looking at 135/685 which is about 19.7%

      The new addition of almost 192 crore in past 3 months can be assumed at all in retail. 20,000 people bought about 87 shares each.

      Expect stock to be below 1000 after Results or after record date.

    Is price se mphasis m Kya chances hai acceptance ratio k??? Is it good now?? Stock is in reversal now

      Chances of gains in Mphasis were much better when it was available at Rs 1000. It has already gained back. Let us see the results now.

    As per Sep-18 shareholding pattern released to the exchanges today, retail shareholding has gone up from 2.32% to 3.22% Jun-18 to Sep18. That’s a near 40% increase in retail shareholding obviously in anticipation of milking the buyback arbitrage.
    Given how Jagran Prakashan stock has been down in the dumps ever since its buyback announcement (CMP 108, Price at buyback announcement 160, Buyback price 195, Acceptance 20%), one should be very wary of investing in Mphasis from a buyback angle.
    Where can the stock settle? At CMP, stock is at 20+ on TTM earnings which is not a bargain really.

      No one can tell this for sure, one can only guess. Entitlement ratio can be known only after closure of record date.

      approx 20-30%
      not more than that

      wait for 17th and decide after 17th accordingly as advised by @marketwizard

    Please let me know if we can buy Mphasis or still wait for the price to fall? What is the latest opinion/recommendation on this buyback. Little scared looking at the market volatility and already incurred losses.

      My opinion:
      If you are looking to buy from long term perspective, price is good. But if you are looking only from Buyback perspective then better stay away as acceptance ratio would not be as much it appeared 2 weeks back.

    The way market has plummeted over last 3 weeks, any fresh entry into MPhasis (or any new ones) for Buyback has become real risk now. Initially, it used to appear that acceptance could be 60 to 100% for Mphasis, but now a whole lot of new investors would have already entered seeing big gap with buyback price. I fear whether even 10% entitlement would come now. Those have entered about 1100 are stuck for long term. Better to stay away from Buyback in current market (unless you decide to hold stocks for very long term) as it may take more than a year or Sensex may not even regain 38K level even in next 2-3 years the way things are going in India market (and elections are round the corner, that will not allow rebound). One after other sectors are collapsing.. Realty then Telecom, then Airlines, now Banks and Financial sector, all going one by one. IT is holding the market, but if Trump takes touch stance on India due to Russian deal, IT may see biggest hammer.

    My post doesn’t mean all negative only, but things are really difficult for short to medium term. This is good time for SIP as accumulation in lean phase will fetch far better returns when market rebounds back.

    Mr Wizard , Except today where the market was on a bull run the mphasis stocks have been hammered even after the announcement of record date ? Are we retail investors missing something or the acceptance ratio is going to be very adverse.

    Your views please.

    Why mphasis share price decreasing sharply .for buyback can I buy at current level.what may acceptance ratio.

      I think rumour in the market that results of Mphasis wont be good. I think lot of good opportunities are there in the market apart from buyback. Those who bought at higher level please stay invested.

    NLC Buyback | NLC board approves buyback of 9.28% shares of co worth up to Rs 1,249 cr at Rs. 88. The CMP is 72.

    HELLO
    IS NOW ON 1170… IF WE BUY TODAY AT THIS PRICE … WILL IT AFFECT THE ACCEPTANCE RATIO IN SUCH A LOW PRICE AFTER ANNOUNCING BUYBACK….CAN IT BE BOUGHT PLEASE SUGGEST AT THESE LEVELS

    *FWD AS RECEIVED*

    Nifty

    After 2008 fall of 65% from high, in last 10 years Nifty corrected double digit % fall in 5 times:

    1) Dec 11 -29%
    2) Aug 13 -18%
    3) Feb 16 -25%
    4) Dec 16 -12%
    5) Mar 18 – 11% and
    6) This is the 6th time so far 13%

    In all 5 previous falls it never violated previous fall’s low.
    March 18 low was 9952.

    Hence 9900-9950 remains the most important level to keep in sight.

    It is getting problematic now. The acceptance ratio will go down drastically in this buyback if share price wont improve in coming days. Lot of people who bought above 1200 looks struck to me unless they average it. However, averaging at this juncture could be dangerous as market may tank more if Nifty Breaks 10k levels. So it is very difficult to say anything at this juncture. We need some sanity in the market to gain from here on. FII are continously selling from last one week as they are finding US Market as safe heaven due to High bond Yields. The dollar and Oil until these two factors wont improve the situation would remain dicey.

    @saurabh

    I am investing in the market since the past 1 year
    haven’t seen anyone cancelling buyback after announcing record date, i am not sure but i think SEBI will take action if such thing(recalling buyback) happens, but as per market sentiment it is very risky as shares could still fall further and erase the gains from buyback(remember only certain percentage, this time small one as bears have gripped the market) will be eligible for tendering(rest shares will be with you only)

    Today Mphasis reach 1100. Is it good to buy for buyback? or any possibility with roll out of buyback offer?

      With record date announced, i do not think it is possible to rollback. Either retail subscribers have increased so much in this buyback that the ration of buyback might be less than expected and hence the people in the know could be selling it.
      Also, maybe since the entire IT is down, it could be just following the trend.
      ( Note than mphasis had almost doubled in last one year or so, unlike other IT stock which had just gone up abt 50% or so

    what are the possibilities of Mphasis recalling the buyback offer? retailers are already in fear.

    Currently it seems Mphasis is totally detached with IT index making new lows everyday. No buying for buyback visible. Can’t guess logic behind this move.

      I think someone is purposely beating down this stock..and may be we can see rally near to record date…its good time to enter this stock .

    One more money making idea
    Buy back opportunity in IT company Mphasis @1350 and CMP is only 1160 so a premium of 16 odd %
    Record date announced 25th Oct 2018 so it means that Buy back would be completed in next max 2 months and even if 60% acceptance ratio is assumed on conservative side even then decent returns of approx 10 % can be made in 2 months (ASSUMING MARKET RATE REMAINS SAME) so should go for it up to 2 lakhs in retail…Invest 175k and returns expected 17k with assumptions as mentioned above…

    *Buyback update*

    👉Mphasis 25 Oct is record date for buyback

    👉L&T Buyback record date will announce shortly

    This Mphasis daily provides the same info to the bourses.

    Approval of buyback

    But not annoucing the date of buyback.

    The way market is cracking and gap with buyback price is increasing, is there any chance of Mphasis and L&T buyback may get called off ?

      Yes. Mphasis is a good buy below 1200 for decent gains through buyback.

    T D POWER SYSTEMS
    Buyback upto 30cr at Rs 256/sh (80% prem)

    At 256/sh: Can buy 11.7lkh shrs
    If they buy for eg at an avg of 200/sh; they can buy 15lkh shrs
    Hence atleast 3.5% to 4.5% shares extinguished

    GOING BY ANNEXURE-A
    Promoters won’t participate

    Finally +Ve intent!! (Twitter)

      Wizardji
      What is the acceptance ratio in TD Power Systems?

      Kindly guide whether which is good price to enter into TD Power Systems?

      TD is not through tender offer and would be by open mkt purchase.
      So does not make sense in my view to invest.

    Last year, retail category got 100% acceptance. Now, I see that investors having less than Rs 2 L worth shares are only around 2%, this number is similar to what TCS has.

    Since TCS has got almost 100% acceptance, can we expect the same for MPHASIS too ?

      How do you get this data that only 2% are holding shares of 2L worth?

        From BSE website, June 2018 Sharehlding pattern:
        Individual share capital upto Rs. 2 Lacs 2.32%
        Individual share capital in excess of Rs. 2 Lacs 1.15%

            Nice talking to you and educating me for something I did not get answer anywhere. Please remove my phone number from this page.

    How many maximum shares can we buy in Mphasis to be eligible in Retail category? is it 148 shares? (148*1350=1,99,800). Plz provide clear guidance for all buyback for qualifying in retail.

      Mphasis Buyback date is quite near with poor sentiments in the market the price hardly go above 1250 level. Considering price of 1250 , you can buy 160 shares. However, if price go above 1250 then you will not be counted under retail category. So be on safe side buy, 150 shares.

    *Buyback Update*

    Mphasis current price-1193

    Buyback price-1350

    Record Date – Announce within 1 Week

    Acceptance Ratio Tentative-50%

    ☸☸☸☸☸☸☸
    L&T current price-1330

    Buyback price-1500

    Record Date – Announce after 1 week

    Acceptance Ratio Tentative-40%+

    ☸☸☸☸☸☸☸☸

    Redington Current price-98

    Buyback price-125

    Record Date – 28 September

    Acceptance Ratio Tentative-30%+

    ☸☸☸☸☸☸
    ———————————–

    ☸☸☸☸☸☸
    TCS Buyback Acceptance Ratio 100%

    ☸☸☸☸☸☸

    HCLTech Acceptance Ratio may come 85% to 100%

    ☸☸☸☸☸☸☸
    Navneet Education Acceptance Ratio may come 40%+

      Sir, can I get the this figure:
      Number of shares with Retail Investors within range of less than Rs 2 L ?

      No. You can only get the data of total numbers of shares held by shareholders.

            Then we should wait till AGM.The Current Market Price is Rs. 512. If any positive announcement comes in AGM then we will buy . In PCJ case banks their lender didn’t give permission for buyback and it was finally canceled.

    Bought mphasis today at 1184. I think it is a good entry point at current level for buyback.

    *Kiocl buyback*
    Buyback size – 1,25,88,235 shares
    Buyback price – 170/-
    Buyback size – Rs. 214 crore

    Record date expecting around 7 th October. So slowly it can be accumulated now.

    Keep an eye on Mphasis. It is nearing 1200 today. This can be a good opportunity to enter for buyback.

    👉Mphasis buyback record date may come October first or second week

    👉L&T buyback record date may come October second or third week

    👉Redington buyback records date 28 September

    It will take another one month to announce Record date. So if get chance near 1200 then accumulate it.

    As per Annual Report up to March 2018, the no. of shareholders having shares between 0-500 were 20,840 having shares 1,355,829. As more people will buy shares till record date for participation in the buyback, assuming retailers having 20 Lacs shares as on Record date, the Acceptance ratio should be around 50-60%.

    15% of 7,320,555 No. of Equity Shares =.11 Cr No. of Shares Reserved for Small Shareholders.

    Mphasis buyback –

    The promoters are also intending to tender their shares in the buyback by Mphasis In its report, *HDFC securities* highlighted that “Even assuming 60% acceptance ratio and the market price not falling below Rs 1,080 post the payout, investors can earn an absolute return of 8% (subject to short term capital gains tax) over the next 90 days (maximum average time taken from board approval to payout in recent tender offers) leading to an annualized return of ~32% p.a. Every 5% increase in acceptance ratio could improve annualized return by 4.7% p.a”.

    Mphasis in March 2017 also made a similar buyback offer during which shares tendered by the small shareholder category amounted to be less than the reserved portion for them as a result acceptance ratio turned out to be higher than the theoretical value arrived at for acceptance of shares by the company during the buyback.

    *Mphasis Limited*
    *Buy – back*
    *View : Positive*
    UPSIDE % = 17 % ( difference between Buy-Back price and CMP – Rs.1152.50)
    Promoter’s Holding = 52.37%
    Public holding upto Rs.2Lacs = 2.32% = 4483601equity shares
    CMP = Rs.1152.00/- per share
    MARKET CAP = Rs. 22281.49 crore
    *BUY – BACK Price = Rs1350 per share*
    Buy Back of Shares = 7320555 equity shares (representing 3.79% of the total number of equity shares in the paid-up share capital of the Company)
    *Route : Tender offer*
    Retail Acceptance ratio = 25% ( higher probability of acceptance may go upto 40-50%)
    Overall Acceptance ratio= 4%
    Total Buyback size : Rs 988 Crores
    Promoter’s would participate.

      Should we buy Emphasis at CMP for buyback purpose or wait for further downside.

      What is the safe level for this purpose?

      What does negative reaction after announcement signify?

        I would say we should start accumulating Mphasis at current levels and add on dips. We have seen how investors were waiting for TCS to fall below 1800 to make an entry but unfortunately, it didn’t break that level and inversely keep on rising from thereon. So averaging is a good option in Mphasis. The company has posted excellent Q1 numbers that will also support price. Please remember to be eligible for buyback under the retail category you should not have shares worth more than 2 lacs as on Record Date( which is to be announced later) else your bid will be rejected while tendering.

          Correction Mr. Wizard,
          Your bid would not be rejected, but considered in General!!!

              There are 2 categories:
              1. Retail – reservation 15%
              2. General – It includes all except retail, including promoter

                Okay. My meaning of rejection was that you will not be eligible for 15% reservation.

    Mphasis has made a stunning performance in Q1

    i) Net profit attributable to shareholders growing 38 percent to Rs 258.3 crore in the said quarter from Rs 187.19 crore in the year-ago period.

    ii) Revenue from operations increased 18.5 percent to Rs 1,820.22 crore in the quarter under review as against Rs 1,535.97 crore in the same period last fiscal.

    iii) The company has bagged deal worth USD 153 million in total contract value in Direct International business.

    Will also see participation from the Promoter in this buyback who has 52.36 percent shareholding.