NLC India Limited Buyback offer 2018

(i) NLC India Limited, formerly Neyveli Lignite Corporation Limited, was incorporated on 14th November of the year 1956 as a private limited company under the house of Government of India (GOI). It went to public on 7th March of the year 1986.

(ii) The main core activity of NLC is lignite excavation and Power Generation using lignite excavated. NLC is having three lignite mines of the total capacity of 28.5 Million Tonnes per Annum at Neyveli, Tamil Nadu and one open cast lignite Mine of capacity 2.1 Million Tonnes per Annum at Barsingsar, Rajasthan. The company has five pithead Thermal Power Stations with an aggregate capacity of 3240 MW.

(iii) Further, NLC has also so far installed 17 Wind Turbine Generators of 1.50 MW each, aggregating to 25.5 MW, thereby increasing the overall power generating the capacity to 3265.50 MW. NLC forayed into renewable energy sector with the inauguration of a 10 MW Solar Photo Voltaic power plant in Neyveli, thereby increasing the overall power generating the capacity to 3275.50 MW.

(iv) Interesting facts about NLC India Limited

(a) A NAVRATNA company under the Ministry of Coal.
(b) since 1956 – more than 60 years of its glorious existence.
(c) Present Mining Capacity: 30.6 MTPA ( Lignite ).
(d) Present Power Generation Capacity (including JVs) : 3240MW (Lignite), 1000MW (Coal), 440MW (Solar), 51MW (Wind), Total : 4731MW.
(e) Projected Capital Expenditure (up to 2025) : Rs.1,28,983 Crore with a debt-equity ratio of 70:30.
(f) Moved from an only lignite mining and power generation Company to become an energy company.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: Oct 24 2018
Buyback Opening Date: Nov 13 2018
Buyback Closing Date: Nov 28 2018
Buyback Offer Amount: ₹ 1248.99
Date of Board Meeting approving the proposal: Oct 09 2018
Date of Public Announcement: Oct 09 2018
Buyback Offer Size: 9.28%
Buyback Number of Shares: 141,931,818
FV: 10
Buyback Price: ₹ 88 Per Equity Share

Details of Buyback:

The Board of Directors of the Company Approved the proposal to Buyback of not exceeding 141,931,818 Equity shares at a price of Rs. 88 (Rupees Eighty-Eight only) per equity share (the “Buyback Offer Price”) of face value Rs.10 each, payable in cash for an aggregate consideration not exceeding Rs. 1248.99 crores.

Salient financial parameters:

Year Revenue(cr) PAT(cr) EPS P/E
2016 7194 1204 7.18 11.14
2017 9235 2368 14.14 5.66
2018 9076 1848 12.09 6.62

How to Participate in buyback?

1. Firstly, to be eligible for the buyback the investor should have shares of NLC India Limited Buyback offer 2018 in demat or physical form as on the record date [24.10.2018] 2. Once you have shares in demat, you can participate in the buyback process which is opening from [13.11.2018 to 28.11.2018] by selling your shares through your broker on NSE or BSE. 3. Then on [04.12.2018], 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:

A) Buy 2200 Shares at CMP of Rs.75 [193,600/88=2200)
Acceptance Ratio 33% 50% 75% 100%
(i) Amount Invested in Buyback 193,600 193,600 193,600 193,600
(ii) No. of Shares buyback 726 1100 1650 2200
(iii) BuyBack Profit 9,438 14,300 21,450 28,600
(iv) Profit(%) 4.8% 7.38% 10.94% 14.77%
B) Last Buyback Acceptance Ratios Details Acceptance Ratio Detail of NLC Buyback 2016

Recommendation:

Review and Recommendation of NLC India Limited Buyback offer 2018 by InvestorZone team is: 4/10 Fair: 1-5 Good:5-7 Excellent: 7-10 LIVE SUBSCRIPTION OF NLC LIMITED BUYBACK 2018

Company Contact Details:

NLC India Limited First Floor, No.8, Mayor Sathyamurthy Road, FSD, Egmore Complex of Food Corporation of India, Chetpet, Chennai - 600031. Website: www.nlcindia.com

    BHEL Approves Buyback up to 189.3 Million Shares and Rs. 86. 20% Premium to CMP.

    Acceptance Ratio Calculation:
    No. Of Shares Reserved for Reatil= 2.83 CR
    As per Sept 18 shareholding pattern, the number of investors having shares up to 2 Lacs of paid-up Capital is close to 15 CR.
    As per the above figure, the Acceptance Ratio would be 18%

    COCHIN SHIPYARD BUYBACK
    No. Of Shares= 43,95,610
    Price= Rs. 455
    Total AMount =200 Cr
    A Retail investor can buy 440 Shares( 2lakh/455) to participate in the buyback.
    As per Mar 18, the number of investors having shares between 1-500 are close to ~73 Lakh.
    The No. of Shares reserved for Retail Investor in Cochin Buyback is close ~6.60 Lakh.
    As per above figure the Acceptance Ratio would be 9%

    1. Shares reserved for Retail Category are close to 2.128 Cr.
    2. As per March’18 Shareholding Pattern, the total number of shares up to 3000 is ~2.17 Cr
    3. As per June’18 Shareholding Pattern, the total number of shares up to 20k is 2.77 Cr.
    4. Assuming total shareholders till Record Date is ~3 Cr.
    5. Then Acceptance ratio would be close to 70%.

    If Share price move closer to buyback price than 100% Acceptance also possible.

    Svmbol NATIONALUM

    Subject: Outcome of the meeting of Board of Directors of the Company held on Friday,
    October 12, 2018

    The proposal to buyback not exceeding 67,3 I 1,386[Six Crores Seventy Three Lakhs Eleven
    Thousand Three Hundred and Eighty Six on/y]equity shares of Rs. 5/- each of the
    Company(representing 3.48% of the total number of equity shares in the paid-up share capital
    of the Company) at a price of Rs. 75/- (Rupees Seventy Five only)

    Don’t Jump to buy immediately!!
    It’s already up and market is very good today!!
    May be good at Rs 72-76/- and possible in 2-3 days..
    I would buy in staggered from 78 towards downside.

    This is the new technique Govt is using to meet their target of disinvestment. Actually, in every budget, the govt has a fixed target of disinvestment. Now we have already seen that meeting of disinvestment target through IPO in this market is looking very bleak. The recent listing of PSU has made big holes in the pocket of investors. So investors will think twice-thrice before applying in upcoming PSU IPOs.

    So what is the way left for the govt?

    The answer is the buyback.

    The question is How?

    The Govt is now targeting cash-rich PSU companies, meeting their board members and convincing their board to bring buyback. The govt will participate in the buyback and money received via buyback will be used to meet the target of disinvestment.

    Now you all must have got the answers why so many PSU companies are suddenly coming up with so may buybacks.

      Action of current govt is not investors friendly.. See some of decisions:
      1) Introduction of Long Term gain tax
      2) Soveriegn Gold bond sold at such a high rate that the sale rate never achieved again even though actual gold price has crossed
      3) Most govt sector IPOs has been highly priced
      4) In buyback also, prices are being kept like no one can think of..

      So, investors, beware of this govt decisions and do not rush to govt companies buyback immediately.