NIIT Limited Buyback 2019

Established in 1981, NIIT Limited, a global leader in Skills and Talent Development, offers multi-disciplinary learning management and training delivery solutions to corporations, institutions, and individuals in over 40 countries. The company ranks among the world’s leading training companies owing to its vast, yet comprehensive array of talent development programs.

With a strong focus on assuming a leadership role in the Digital Learning World and to further accelerate NIIT’s growth and profitability, the company has charted a focused business strategy to address the Digital Transformation needs for individuals and corporate customers by offering training and consulting to help them re-invent themselves & their organizations.

Further, NIIT entered into a strategic partnership with UP! Your Service, the global leader in creating cultures of service excellence worldwide, to implement a culture of service excellence across organizations. The partnership with UP! Your Service is a strategic move to expand NIIT’s Corporate Learning portfolio to deliver internal and external cultures of Service Excellence. In addition to its cutting-edge Managed Training Services (MTS), NIIT will now offer services like Service Culture Indicator, Service Leader Workshops, and Service Excellence Workshops to take organizations to a new level of service that is enabled by fundamental principles and actionable models.

The learning platform is a pioneering initiative for advanced career programs, which are delivered live by industry experts in an immersive and interactive online mode, combining instructor-led classrooms with the convenience of accessing the training sessions from anywhere. The programs are targeted at working professionals who want to take their careers to the next level by enhancing their knowledge of the latest concepts through programs offered from premier institutes like IIM Calcutta, DMI Ireland, and edX.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: Oct 18 2019
Buyback Opening Date: Nov 25 2019
Buyback Closing Date: Dec 06 2019
Buyback Offer Amount: ₹ 335 Cr
Date of Board Meeting approving the proposal: Aug 10 2019
Date of Public Announcement: Aug 10 2019
Buyback Offer Size: 15.998%
Buyback Number of Shares: 26,800,000
FV: 2
Buyback Price: ₹ 125 Per Equity Share

Details of Buyback:

The company approved a proposal for buyback of up to 26,800,000 fully paid-up Equity Shares of the Company of face value Rs. 2 each, being 15.998% of the total issued and paid-up equity share capital of the Company as per the audited consolidated and standalone condensed interim financial statements ("Audited Condensed Interim Financial Statements") as at and for the period ended June 30, 2019, for an aggregate amount not exceeding Rs. 335 Cr, which is not exceeding 25% of the aggregate of the total issued and paid-up equity share capital and free reserves as per the Audited Condensed Interim Financial Statements of the Company as at and for the period ended June 30, 2019, at    Rs. 125 per share via " Tender Route".

Salient financial parameters:

Particular(Cr) 2019 2018 2017 2016 2015
Revenue 369.38 361.87 366.29 381.45 348.54
Other Income 60.78 51.12 42.53 40.42 36.92
Expenditure -389.48 -383.5 -389.32 -373.43 -442.01
Net Profit 16.37 5.15 -5.07 0.11 -116.1
Equity 33.47 33.32 33.15 33.1 33.04
EPS 0.98 0.31 -0.31 0.01 -7.03
OPM % 11.01 8.15 5.32 12.7 -16.22
NPM % 4.43 1.42 -1.38 0.03 -33.31
IZ Review 1. The Revenue for Q1FY20 has gone down by 4.1% QoQ. 2. The EBITDA has gone up by 1.95x times in Q1FY20 as compared to the last quarter due to a reduction in " Professional & technical outsourcing expenses " and "Other expense". 3. The company has shown an EPS of 65 on account of an exceptional item worth Rs. 1291 Cr. This exceptional profit came after NllT Limited has entered into a Share Purchase Agreement (SPA) with Hulst B.V. (Purchaser) on April 6, 2019, to transfer its entire shareholding in NIIT technologies Limited for a consideration of Rs. 20,204 Million. 4. Ace Investor Mr. Ashish Kacholia has increased his takes in NIIT limited from 2.83% to 2.85% in June Qtr.

How to Participate in buyback?

1. Firstly, to be eligible for the buyback the investor should have shares of NIIT Limited Buyback 2019 in demat or physical form as on the record date [18th Oct 2019] 2. Once you have shares in demat, you can participate in the buyback process which is opening from [ 25.11.2019 to 06.12.2019 ] by selling your shares through your broker on NSE or BSE. 3. Then on [ 17.12.2019 ], 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 1600 Shares at CMP of Rs. 97 [2,00,000/125=1600)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,55,200 1,55,200 1,55,200 1,55,200
No. of Shares buyback 528 800 1200 1600
BuyBack Profit 14784 22400 33600 44800
Profit 9.5% 14.4% 21.6% 28.8%


Review and Recommendation of NIIT Limited 2019 Buyback 2019 by IZ team is: 5/10. [ Expected AR= 30%] Final Acceptance Ratio
Category No. of Shares reserved for Buyback No. of Valid Applications Total Shares Tendered % Response
Retail Shareholders 40,20,000 15,276.00 63,03,824 156.81%
General Category 2,27,80,000 1109 6,32,19,333 277.52%
Final AR = 64%.


      259.45% showing in BSE is cumulative of both BSE and NSE or only BSE?

      If this is cumulative, then I suppose AR for retail investor will be very good, more than 60%. Correct if I am wrong.

    69532970=259.45% shared tendered on BSE up to 3:30 PM on 06.12.2019, the last day.

    60515134@225.8% share tendered on BSE @3:30 PM on 05.12.2019. Still one more day is left. It seems AR would be very near to ER.

        There are close to 12,000 orders only. Total, number of small shareholders are close to 63,000. We may have a good acceptance ration here.

      Where do you see on BSE? Is it like only on BSE or, it will be on NSE also? is it like buyback is being done only via BSE for NIITLTD? Thanks in advance

    Hello Market Wizard, Could you answer my below question..
    Currently BSE Demand schedule for niit buyback shows around 88%. But i have participated in this Buyback through Zerodha trading console, it is still showing Pending.. looks like Zerodha will put all its customer order to exchange only on last day of buyback. So my question here is, so current demand schedule showing at BSE is not accurate right, since zerodha like brokers will place most of their bids at last day?

    I have 2500( 800 share in DP and 1700 share in pool account) share of niit ltd on record date
    How many share for eligible for buy back ?

    I haven’t received Offer letter from company others received offer letter from company. What should I do now? Ple tell me market wizard

      Hi MW,

      What is the meaning of entitlement ratio? If I had 100 shares in my account as of record date, does it mean that I will only be able to tender 21 shares for buyback? If that’s the case, is it guaranteed that the 21 shares will be accepted?

      Thanks in Advance.

        Entitlement means, 21 shares are a sure shot to be accepted. You can sell 79 shares and rest assured with the remaining 21.

      Does this mean, I can tender only 21 out of 100 shares? If yes, would the acceptance ratio based on the number of shares tendered (I.e. number of shares actually bought back would be lower)?
      Can I exit the balance shares (79shares) on market today onwards?

    Niit buyback open date on 25 November and close on 6th December and payment on 17th December

    Now share price is increasing and we already exited.

    So when buyback date comes, We need to buy with highm price

    So it became a bad idea

    Hi MW,

    Could you help me with below 2 queries ..

    1) I bought this today(Oct 16) in zerodha.
    Can I sell on 18th Oct or Do I need to wait till 21st Oct ???

    2) Any idea when will be the buyback date ??

      The shares will come in Demat on 18th. So you will be able to sell on 21st only. You should have bought 2-3 days earlier..

      Wohi dar hai sir. Kal agar bach Gaya toh maza aa jayega. let us see.

          As per latest shareholding pattern, retail investors (holding value less than 2 lakhs Rs) is around 2.5 crores … so assuming if all this retail investors participate in this buyback .. the minimum acceptance ratio comes around 16% … as around 40 Lakhs shares is reserved for retail investors in this buyback proposal ..

            The way this this stock is getting bombarded, this will become another mphasis or heg after record date. Better avoid new entry than making fresh positions.

    Can sell share on ex date which is on 17 Oct then will I eligible for buyback tender.

      Yes, but we have in the past faced issues with Zerodha. So better to sell after the 18th. or better confirmed from your broker.

        Usually if u sell shares … it will be debited from your Demat account on T+1 day.. so if you sell on 17th Oct, shares will be debited from Demat Account on 18th Oct … but on the company(NIIT) record it will be reflected only on 19th Oct so as per record date 18th Oct it will still show ur name on company record .. so u will be eligible for buyback .. But as market wizard suggested just call to ur broker and confirm once

    In Zerodha it is showing Open Market purchase, here it is mentioned for Tender offer. Market wizard please confirm?

        Hi Market Wizard,

        We know that you have mentioned this is good level for purchase, but do you sense anything wrong here because share price continues to fall even when buyback record date is so close?
        Please guide if we should still continue to accumulate.


          Yes, you are right. The sense is not coming positive. So better to buy less quantity.

    NIIT LTD company 16% share buy back ker rahi hai ye share kya keval public se hi liye jate h ya sabhi se Promotr and mutual fund se bhi pls rply

      sabse liye jaayenge including Promoter, Mutual Funds, Insurance Companies, HUFs, FIIs and HNIs.

      Record Date may be announced on 5th itself after declaration of result. However, Special Resolution is valid for one year. But if promoters want money sooner they will choose the earliest possible record date.

    Some big game has happened today in NIIT. The NIITIAN trust sold shares in open market. They could have waited for buyback and participate in it.

      Buyback would be only 15% for General Category Investor. The seller seems to have a view that ex buyback the Market price would be below 85. He booked profit on all his investments yesterday rather than having some profit on 15% of his investments (Buyback) and a much lower rate on 85% of his investment.

        Had there is no buyer at 83 when a sudden fall happened from 90 odd levels the share would have hit LC as it was a huge volume to consume. However, the share do not hit LC and recovered in no time. This suggests they have done this in a planned way.

          Of Course this was a prenegotiated deal a d NIIT welfare is most probably out of it’s entire holding of NIIT. This is only indicator of valuation. There is definitely someone for whom deal is attractive.
          The main devil is tax even if company did EPS of 65 on sale of NIIT Tech. distributing that will lead to tax of about 33%in case of buyback and 40% in case of dividend. Which is whooping RS 21 to RS 26. Remember that company has already paid income tax to get that RS 65.


    NIITIANS WELFARE TRUST S 1,518,028 85.21

    NIITIANS WELFARE TRUST SELL 14,89,935 85.44 –

    Today it gave an opportunity to buy at 84 levels but just for a moment. Those who were on screens may be able to buy it.

      There is some desperate seller who was selling today at below Rs85. It looks like this will tank ex buyback to its 52 lows of around Rs 65. Confirm Entitlement is 13% rest is dependent upon how many people buy the stock till record date and how many tender. There is huge money in the system people had put in abut 2000crors just for buyback in Wipro. So, forget days of 100% acceptance.

    what is the expected AR
    the market is falling and it si very risky
    Already we have burned our hands in quickheal and more, wipro also didn’t provide the profit as expected

    Now Wipro payout is executed. Expect NIIT to rise because most people would deploy Cash received from Wipro to NIIT.

    Hi Team,
    Could you please share how to book profit for shares, which are brought in offer for sell? whether we need to sell the share immediately or need to wait for 10 or 20 days to see any profit?

        Still allotment not done. In case if it’s allotted , could would be better approach in booking profit? whether to sell the share immediately or need to hold for 10-20 days to better profit…

          Insurance and AMC these days are the best stock to invest. A lot of buying interest is coming from Institutional investors. So you can hold the share no problem but horizon should 2-3 months not 10-20 days.

    please some body tell me , if i have the shares in my dmat account on record date of buyback, then i sell it after record date and repurchase it before buyback closing date. am i entitle to participate in buyback ? will my tender be considered for buyback of shares or not ?

      Already level of 90 has hit today and falling…. So, better avoid this one.. this will be similar to mphasis where people stuck at high level.

      52 wk low is 60 and now a days many script are touching 52 wk low level. So, NIIT will be going for that too if nifty is making lower lows.

          I think as record date is not announced, one can buy in small quantity on every dip like may be in multiple of 400

    I think Postal ballot will be required here , so it can take around 1-2 months for record date to be declared. Kindly correct if wrong ?

    is the CMP good to enter for this buyback or can we expect downside in the near future?

      I think on Tuesday it will open higher. So will make strategy accordingly. The price of 93-98 is good to enter.

    [11/08, 10:59] Market Wizard: NIIT limited exceptional EPS of 65 came due to selling of its shares in NIIT tech to one of the investors.

    The reserves and paid up capital upto 31.03.2019 was 833 Cr. The max buyback size is 25% of this reserve and paid up capital. Generally all companies which do buyback in a year takes 31.03.2019 reserve and paid up capital as reference.

    However, due to selling of shares by NIIT limited they get 1291 cr.

    So that they have taken reserve and paid up capital of 30.06.2019 as a base to bring buyback.

    That is why the size of buyback is 335 cr.

    So first they have earned good money via selling stakes and now the company is doing buyback of 335 cr

    Win win situation for promoters.

    Yeah deal nhn Hui hoti toh itna bada buyback na aata.😬

    As per the annual report 20180-19, the shares between 1000-5000 are only 78 Lakh. So assuming some more people add for buyback, the accepted AR should be above 30%.

    The company has shown an EPS of 65 due to exceptional income. This item has come up due to:

    After the close of FY19, the Company executed a Share Purchase Agreement (“SPA)” on April 6, 2019, with Hulst B.V. (“Purchaser”) and NIIT Technologies Limited (“NTL”) for the sale of its entire shareholding, comprising 14,493,480 equity shares of Rs. 10/- each in the equity share capital of NTL, to A purchaser at Rs. 1,394/- per equity share, for an aggregate consideration of Rs. 20,204 million as per the terms and conditions stated in the SPA.

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