NMDC 2020 Buyback

Incorporated in 1958 as a Government of India fully owned public enterprise. NMDC is under the administrative control of the Ministry of Steel, Government of India.

Since inception involved in the exploration of wide range of minerals including iron ore, copper, rock phosphate, limestone, dolomite, gypsum, bentonite, magnesite, diamond, tin, tungsten, graphite, beach sands etc.

NMDC is India’s single largest iron ore producer, presently producing about 30 million tonnes of iron ore from 3 fully mechanized mines viz., Bailadila Deposit-14/11C, Bailadila Deposit-5, 10/11A (Chhattisgarh State) and Donimalai Iron Ore Mines (Karnataka State).

NMDC has made a valuable and substantial contribution to the National efforts in the mineral sector during the last five decades and has been accorded the status of schedule-A Public Sector Company. In recognition of the Company’s growing status and consistently excellent performance, the Company has been categorized by the Department of Public Enterprises as “NAVRATNA” Public Sector Enterprise in 2008.

Strong back up of an ISO 9001 certified R&D Centre, which has been declared as the “Centre of Excellence” in the field of mineral processing by the Expert Group of UNIDO.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: Nov 23 2020
Buyback Opening Date: Dec 17 2020
Buyback Closing Date: Dec 31 2020
Buyback Offer Amount: ₹ 1378 Cr
Date of Board Meeting approving the proposal: Nov 10 2020
Date of Public Announcement: Nov 10 2020
Buyback Offer Size: 5%
Buyback Number of Shares: 13, 2,43,809
Price Type: Tender Offer
FV: 1
Buyback Price: ₹ 105 Per Equity Share

Details of Buyback:

Buyback of not exceeding 13, 2,43,809 ( fully paid-up equity shares of the face value of Re. 1/- each (representing 4.29% of the total number of fully paid-up equity shares in the paid-up share capital of the Company) at a price of Rs. 105 (Rupees One Hundred Five only) per equity share (the "Buy Back Offer Price") payable in cash for an aggregate consideration not exceeding Rs. 1378,05,99,945  (the "Buyback Offer Size") representing 5.00% and 5.05% of the aggregate of the fully paid-up equity share capital and free reserves (including securities premium) as per the audited standalone and consolidated financial statements of the Company, respectively for the financial year ended March 31, 2020.

Salient financial parameters:

Particulars (in cr) Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20
Sales 12,356 6,456 8,828 11,615 12,153 11,699
Expenses 4,591 3,771 5,234 5,868 5,229 5,917
Operating Profit 7,765 2,685 3,594 5,747 6,924 5,782
OPM % 63% 42% 41% 49% 57% 49%
Other Income 2,155 1,682 910 723 589 637
Interest 0 66 21 37 40 10
Depreciation 173 218 197 257 279 295
Profit before tax 9,747 4,084 4,287 6,176 7,194 6,114
Tax % 34% 34% 40% 38% 36% 41%
Net Profit 6,347 2,546 2,544 3,808 4,618 3,573
EPS in Rs 16.01 6.42 8.04 12.04 15.08 11.67
Dividend Payout % 53% 171% 64% 36% 37% 45%
Cash in hand 18,486 14,806 5,321 5,461 4,619 2,437
Source: Screener.in  

How to Participate in buyback?

1. Firstly, to be eligible for the buyback the investor should have shares of NMDC Limited Buyback 2020 in demat or physical form as on the record date [23.11.2020 ]. 2. Once you have shares in demat, you can participate in the buyback process which is opening from [17.12.2020 to 31.12.2020] by selling your shares through your broker on NSE or BSE. 3. Then on [08.01.2021], 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 1904 Shares at CMP of Rs. 94 [2,00,000/105=1904)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 178976 178976 178976 178976
No. of Shares buyback 628 952 1428 1904
BuyBack Profit 6912 10472 15708 20944
Profit 4% 6% 9% 12%

Recommendation:

Review and Recommendation of NMDC Limited Buyback 2020 by IZ team is: 6/10 Fair: 1-5 Good:5-7 Excellent: 7-10 [ 10% upside is there from the CMP. Last time the AR was 100% as the price of share exceeded the buyback price. The same can be expected this time, as the results are very good for Q2 quarter.]

71 Comments

    Can somebody tell me the amount of tax I will have to pay on amount earned from buyback

    *Engineers India limited buyback – Record date fixed as 1st January, 2021*

    Buyback size : 6,98,69,047 shares

    Retail Quota : 1,04,80,358 shares

    Buyback Price : 84/- per share

    Sell now and buy later, if comes down at the time of buyback offer period……free me Option to sell @105 😉

    Sold at 106.9 !!
    At least brokerage / taxes received more than Buyback!!!!!!!!!!

    NMDC buyback is over now. All should sell and exit who bought for buyback.

    It appears NMDC would reach above 105 before Buyback..

    It would allow Govt to sell their shares through tender offer…

    LIC would be the loser, which is currently buying shares and would not tender in buy back…

    But good for retail like us 🙂

      Still postal ballot is going on so record date may go end of December for engineers india.Its wild guess

        Engineers India Record Date will be declared after 21/Dec/2020 as that is the date for ballot result declaration. So, expect the record date to be somewhere in the 1st week of January’21 .

    CASH OFFER FOR BUYBACK OF NOT EXCEEDING 13,12,43,809 (THIRTEEN
    CRORE TWELVE LAKH FORTY THREE THOUSAND EIGHT HUNDRED NINE)
    FULLY PAID UP EQUITY SHARES OF FACE VALUE OF RE 1 EACH AT A PRICE OF
    RS 105 (RUPEES ONE HUNDRED FIVE ONLY) PER FULLY PAID UP EQUITY SHARE
    ON APROPORTIONATE BASIS THROUGH THE TENDER OFFER ROUTE Wrong he Buyback Number of Shares: 13, 2,43,809

      If acceptance is 50% and you submit your holding of 600 shares only 300 will be accepted. if you buy 500 more shares from the market at a lower rate and submit 1100 shares for buyback, 550 will be accepted..

        Yes, but rate has increased and the risk is high.
        I assume ER – Eligibilty would be 30-40% i.e. 350-400 shares would be accepted directly and further 60% by extra i.e 100 more…
        So overall acceptance would be more than 500..
        Lets see..
        Its increasing instead of decreasing and hence not allowing to purchase…
        Would definitely buy at rate less than 88

        Can you please confirm if this is right or not

        In your case if er is 30% and acceptance ratio is 50%

        Then out of 600 shares accepted will be 330(30% of 1100)+ 135(50% of (600-330))

          No. Buyback is based on acceptance ratio and submitted shares for buyback. Submitted shares should not be more than the shares on record date. If 1l00 shares are available on record date and you sell 500 shares before buyback, then you can submit only 600 shares for buyback. If acceptance is 50%, only 300will be accepted in buyback.

            No, you can sell after record date and then rebuy it before the buyback date…
            So 1100 can be submitted although the entitlement and AR would be different.

              Yes. As I mentioned earlier you can buy the sold shares after record date and submit for buyback. If you are not buying the sold shares, you can submit your holding only. AR is applicable to the submitted shares only.

              So as per Thomas’s logic if one had 1100 on record date and sells 500 afterwards and tender remaining 600
              ER = 30% ALand final acceptance ratio is 50% then only 300 shares will be accepted in buyback

              I don’t think Thomas is right in this case
              I think company will atleast buyback entitled shares based on holding on record date
              Ie 30% of 1100(330) and then acceptance ratio will come into picture for the remaining shares

    Kindly Open a Page for EIL.
    State-owned Engineers India Ltd (EIL) will buy back nearly 7 crore shares for about Rs 587 crore at the price of Rs 84 around 19 % premium to current price.

    NMDC hikes prices for 2nd time this month. Price of lumps increased by Rs 400 & fines by Rs 300/tonne. Key reason for price hike is tight domestic iron ore supply situation: Sources to

    Alert: Co had earlier taken price hike of Rs 150/tonne this month

    What is the criterion for determining RETAIL INVESTOR in NMDC buyback ? is it 200000/105 or LTP on RD or LTPon Announcement date?
    If one has more than 1904 shares, say 3000 shares in demat on RD and offers 1900 shares in buyback, is it OK for eligibility OR is it considered ineligible, as 3000 shares exceeds limit of Rs.2,00,000, in value as on RD, eventhough only part of it is offered for buyback??

      Highest volume price on the record date. Please divide 200000/Highest Volume price on the record date= that will be the number of shares you should have in your account to be eligible under retail quota.

      it did not answer my second question.
      whether max held in DP is considered for RETAIL INVESTOR CATEGORY on RD OR value of what is tendered in buyback is considered as basis for RETAIL CATEGORY, irrespective of holding in DP on RD?these 2 r different.

    Nmdc buyback – If price remains at or above current levels & delivery volume remains same or less, than it’s almost safe to assume 35% acceptance against earlier expectation of 30%.

      I have some strategies for buyback & I want to discuss with you. So Kindly contact me. I want to discuss something about buyback on Eight Eight Zero Eight Zero Zero Seven Seven Five Five

    I buy 1000 shares before record date and sell 500 after record date. Assume AR as 60%. My holding is 500 shares which I can submit for buyback. How much will be accepted? 60% of 500 ie 300 or full 500 shares? shares or

      There are two ratios.
      First is entitlement acceptance, which may be 10 to 20% for retail, depending on no. of retail share holders..
      Second is actual acceptance ratio, it is found from the excess amount of shares people have offered and the shares available in excess after completing entitlement of the offerer.
      So, it would be if you offer 500, 150 or 200 would be accepted based on entitlement and remaining would be 30 to 40% of 350.
      In other words the excess entitlement has nothing to do with your total shares but only to shares applied..

      Don’t expect that all 100% of 500 would be accepted. You need to tender 1000 to let 700 or 800 been accepted…

      Personal and practical experience you have to tender 1000 for 600 acceptance and if you tender 500 … 300 will be accepted as ER you have guarantee of acceptance but above that its calculated on the basis of shares tendered .

    MW, Please add Enginners Ind Buy back page.
    BB Price @84/- (at a Premium of 19.5%)
    Buy Back size 11.06% of Equity shares. ( Rs. 587 Cr)
    Approved today.

    I think one can take a risk and buy NMDC today. If we get the same arbitrage as that of NTPC, we can 4-5% return in next week.

      Ajanta Pharma and HPCL also in line for Buybacks…

      Nmdc is a good bet around 85 IMO

    NMDC 2019 Buyback Final Analysis:-

    The buyback Price was 98 and the buyback size was 1000 Crores. Buyback completed in 1.5 months.

    1. Buyback Announcement date: 08.01.2019 — Share Price was Rs 94.95

    2. 2040 shares bought at Rs 94.95 means an investment of 1,93,775

    3. Retail Acceptance Ratio was 100%. Profit on Accepted Shares= 6222

Leave a Reply