National Aluminium Company (Nalco) Buyback 2021

(i) National Aluminium Company Limited (NALCO) is a Navratna CPSE under Ministry of Mines. It was established on 7th January 1981 in the Public Sector, with its registered office at Bhubaneswar. The Company is a group ‘A’ CPSE, having integrated and diversified operations in mining, metal, and power with a sales turnover of Rs 9,376 crore in the financial year 2017-18. Presently, Government of India holds 56.59% equity of NALCO.

(ii) NALCO is one of the largest integrated Bauxite-Alumina-Aluminium- Power Complex in the Country. The Company has a 68.25 lakh TPA Bauxite Mine & 21.00 lakh TPA (normative capacity) Alumina Refinery located at Damanjodi in Koraput district of Odisha, and 4.60 lakh TPA Aluminium Smelter & 1200MW Captive Power Plant located at Angul, Odisha. NALCO has bulk shipment facilities at Vizag port for the export of Alumina/Aluminium and import of caustic soda and also utilizes the facilities at Kolkata and Paradeep Ports. The Company has registered sales offices in Delhi, Kolkata, Mumbai, Chennai and Bangalore and 9 operating stockyards at various locations in the Country to facilitate domestic marketing.

(iii) The Company is the lowest-cost producer of metallurgical grade alumina in the World as per Wood McKenzie report. With sustained quality products, the Company’s export earnings accounted for about 43% of the sales turnover in the year 2017-18 and the Company was rated 3 rd highest net export earning CPSE in 2016-17 as per Public Enterprise Survey report. With its consistent track record in capacity utilization, technology absorption, quality assurance, export performance and posting profits, NALCO is a bright example of India’s industrial capability.

(iv) NALCO is the first Public Sector Company in the country to venture into the international market in a big way with the London Metal Exchange (LME) registration since May 1989. The Company is listed at Bombay Stock Exchange (BSE) since 1992 and National Stock Exchange (NSE) since 1999. Besides, ISO 9001, ISO 14001, OHSAS 18000 & SA 8000 certifications, the Company has also adopted ISO 50001 standards for Energy Management System.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: Feb 08 2021
Buyback Opening Date: Feb 25 2021
Buyback Closing Date: Mar 10 2021
Buyback Offer Amount: ₹ 749 Crores
Date of Board Meeting approving the proposal: Jan 27 2021
Date of Public Announcement: Jan 27 2021
Buyback Offer Size: 6.98%
Buyback Number of Shares: 13,02,79,083
Price Type: Tender Offer
FV: 5
Buyback Price: ₹ 57.50 Per Equity Share

Details of Buyback:

The Board of Directors of the Company Approved the proposal to Buyback of not exceeding 13,02,79,083 Equity shares at a price of Rs.57.50 per equity share (the “Buyback Offer Price”) of face value Rs.5 each, payable in cash for an aggregate consideration not exceeding Rs.749 crores.

Salient financial parameters:

Particulars(Cr) Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20
Sales 7,383 6,817 7,543 9,509 11,499 8,472
Expenses 5,510 5,858 6,473 8,159 8,607 7,985
Operating Profit 1,873 959 1,070 1,351 2,893 487
OPM % 25% 14% 14% 14% 25% 6%
Other Income 821 659 377 1,170 327 273
Interest 167 3 3 2 2 6
Depreciation 414 426 480 480 476 530
Profit before tax 2,113 1,189 964 2,039 2,741 224
Tax % 37% 34% 31% 34% 37% 39%
Net Profit 1,322 787 668 1,342 1,734 136
EPS in Rs 5.13 3.05 3.45 6.94 9.29 0.73

How to Participate in buyback?

1. Firstly, to be eligible for the buyback the investor should have shares of NALCO Buyback offer 2021 in demat or physical form as on the record date [08.02.2021] 2. Once you have shares in demat, you can participate in the buyback process which is opening from [25.02.2021 to 10.03.2021] by selling your shares through your broker on NSE or BSE. 3. Then on [19.03.2021], 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 3478 Shares at CMP of Rs.48 [200000/57.50=3478)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,66,956 1,66,956 1,66,956 1,66,956
No. of Shares buyback 1147 1739 2608 3478
BuyBack Profit 10896 16520 24776 33041
Profit(%) 6.52% 9.8% 14.8% 19.79%


Review and Recommendation of NALCO Buyback offer 2021 by InvestorZone team is: 5/10 [Good arbitrage of 20% is available between buyback price and current market price. Buyback size is around ~750 Crores which was ~500 Crores last time. Last time AR was around 50%.] [ER at present is 10%]


    Crossed 60 today at the time of falling market of about 2000 point.I think we should wait more till 8th march?

    Do Not Sell Stocks In The Buyback! (NALCO)
    The stock has already moved up in the last couple of months on the back of strong growth expectations from the Manufacturing sector. The quarterly results have been pretty good even during the lockdown phase. These companies reported sharp improvement in margins leading to high profit growth so the stock price has reacted positively. From a wise point of view though, the stock is expected to do well, so it is better to HOLD and NOT tender in buyback. Avoid this buyback for a lucrative opportunity due to privatisation in future.

      Alankit Bose ji, a good analytical study. CMP today crossed BBP. Keep up your good job. Thank you very much for your views.

    Buyback Open from 25 Feb to Mar 10 2021. Settlement of bids on 17th March 2021.
    Reserved ER -11.7%
    General ER – 6.5%

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    I have pledged the 3000 nalco on 3rd of these shares will be considered for buyback entitlement on 8th feb?

      ER Entitlement Ratio which is calculated based on all Shareholder as on Record Date

      AR Acceptance Ratio which is calculated based on the basis of actual applicant of Buyback offer

      Wait for a few days you’ll get to know…since price fell the AR will reduce as many would have tendered over past 2 days

        I am failing to understand how the AR will be 70%….as a matter of fact the individual investor quota was only 15% and total shares subscribed by individual investor was 2.5 crores from a total available shares of 1.05 crores

        I feel the AR for individual investor would be around 40-50%

          Thanks for the information Mr Kedia

          Is this confirmed news on the EIL ACCEPTANCE RATIO.

          Also when will money be credited to our account and also shares returned foe which was not accepted.

      Is it today or tomorrow? Tomorrow is 4 Feb. T+2 means 4feb+ 5&8 Feb. 8 Feb is record date.

    With Increase in market price to 51 AR would be increasing.

    4-5 days further, would it touch 57.50??

      Usually what we have seen for ENGINEERS INDIA & GAIL is that till the 2nd last day of record the price increases then it falls. This is what I have noticed it.

      Sometimes may be the price will reach the buyback price and all will sell before the buyback date pushing the AR to john level.

      Stock Report

      Neelamalai Agro Industries Ltd board approves buyback of 25,350 shares at Rs. 1600 per shareIS IT CORRECT NEWS AS 5.02.21 SAYS RECORD DATE

      Should we invest in this
      How is the company fundamentally
      Any chances of it cracking after record date

    What about AR of engineers India.
    How many times Buyback subscribed till now.
    Any body, any idea…..
    Please share sir

    Should we enter
    What is the likely acceptance ratio
    Any chances of it cravkjnb further

      Aashish I don’t think price will reduce more now only chance is market crashes then price might go down….otherwise I assume price will go higher and higher till the record date….I had bought yesterday with all my brokerage cost @ Rs 47.47 for 2100 shares

      You decide when u want to buy

      I wanted to know
      What are the prospects after the record date
      Fundamentally ,is the company good

      If not then after record date
      Price cracks and donot recover

    Looks a good opportunity. Only 10 days of time to play.

    Should we buy now or wait for announcement. I think the buyback price will be at around 15-20% premium of current price. Kindly Share your views

    Final Analysis of NALCO Limited 2018 ( Return Analysis)

    1. Buyback Announcement date: 12.10.2018—– Share Price was 66.

    2. 2600 Shares bought at Rs. 66 means an investment of 1,71,600.

    3. Retail Acceptance Ratio was 53.75%. i.e. out of 2600 shares, 1397 shares have been buyback by the company. Profit on Accepted Shares–12,573

    4. The unaccepted Shares were given back on 05.12.2018. The share price on 05.12.2018 was close to 66 only. So if you sell remaining shares at 66, then no loss no gain.

    5. Overall we can say a profit of 12,573 on an investment of 1,71,600 in less than 2 months.

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