NMDC Buyback 2019

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: Jan 18 2019
Buyback Opening Date: Feb 13 2019
Buyback Closing Date: Feb 27 2019
Buyback Offer Amount: ₹ 1000 Cr
Date of Board Meeting approving the proposal: Jan 08 2019
Date of Public Announcement: Jan 08 2019
Buyback Offer Size: 3.23%
Buyback Number of Shares: 102040815
FV: 1
Buyback Price: ₹ 98 Per Equity Share

Details of Buyback:

Approved the proposal to the buyback of not exceeding 10,20,40,815 equity shares (representing 3.23% of the total number of equity shares in the paid-up share capital of the Company) at a price of Rs. 98 (Rupees Ninety-Eight only) per equity share (the "Buy Back Offer_Price") payable in cash for an aggregate consideration not exceeding Rs. 1,000 Crore (the "Buyback Offer Size") representing 4.11 % of the aggregate of the fully paid-up equity share capital and free reserves as per the audited standalone Financial statements of the Company for the financial year ended March 31, 2018 through " Tender Offer".

Salient financial parameters:

Year Revenue(Cr) PAT(Cr) EBITDA Margins Profit Margins EPS
FY16 8226 2703 55.0% 32.86% 6
FY17 9738 2583 46.0% 26.52% 7
FY18 12138 3802 52.0% 31.32% 12

How to Participate in buyback?

1. Firstly, to be eligible for the buyback the investor should have shares of NMDC Limited Buyback 2019 in demat or physical form as on the record date [18.01.2019 ]. 2. Once you have shares in demat, you can participate in the buyback process which is opening from [13.02.2019 to 27.02.2019] 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 2040 Shares at CMP of Rs. 94.95 [2,00,000/98=2040)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,93,775 1,93,775 1,93,775 1,93,775
No. of Shares buyback 673 1020 530 2040
BuyBack Profit 2054 3112 4668 6224
Profit 1% 2% 2% 3%

Recommendation:

Review and Recommendation of NMDC Limited Buyback 2019 by IZ team is: 2/10 Fair: 1-5 Good:5-7 Excellent: 7-10 [ The upside from CMP is only 3%. Nothing is there in the buyback ]

    Final AR is 100%.

    No. Of Shares Reserved for Buyback is 1,53,06,123
    No. of Shares Tendered is 1,39,81,064

    Nmdc buyback last date is 27th feb 19. price 98. now the currunt price is 97.2. how? what will be the price at 27th feb 19?

    Appreciate if someone can update number of retail shareholders and number of shares holding by them as on closing of record date..

    Please suggest minimum Acceptance Ratio… Should I buy or wait for more downside.

      Minimum Acceptance Ratio for retail investors as per their last shareholding pattern would be 14% .

        How to Calculate Minimum Acceptance ratio for retail share holders:
        They declared 1000 Crores as buyback amount.. 15% of 1000 Crores i.e., 150 Crores will be reserved for retail investors (those holding shares value less than 2 Lakhs)..

        So, at the buyback price of Rs 98 … there are 1,53,06122 (which is 150 cores divided by 98Rs) shares are reserved for retail investors..

        As per their last shareholding there are 10,32,46,320 shares are held by retail investors..

        So minimum acceptance ration will be 14% which is (1,53,06122 / 10,32,46,320) ..

      Sir, Do you know NMDC buyback Open -Close date ? or Atleast the close Date will come before or after the FEB expiry ? i need to sell covered call on NMDC. so i need this data.
      Please tell approximately also.

    It would definitely fall to 86…
    Today or tomorrow, definitely before record date…

    One can consider buying NMDC below 90. That will give 8.8% of the return if AR is 100%. Chances of AR 100% is high because eventually, the share price will cross 98 till buyback process gets completed.

    Everyone was expecting a buyback price of 105-110. At buyback price of 98, a limited upside is there in the buyback. However, the bright side is the AR could be 100% as very few people will apply. So 3% gain is not that bad either if it happens the way we are assuming today.

    The Company has fixed Friday, January 18, 2019 as Record Date for determining the entitlement and the names of the Eligible Shareholders.

      Outcome of the meeting of Board of Directors of the Company held on 8th January 2019

      In furtherance to our intimation dated 1st January 2019 and in terms of Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, please note that the Board of Directors of the Company in their meeting held on 8th January 2019 has inter-alia:

      Approved the proposal to buyback of not exceeding 10,20,40,815 equity shares (representing 3.23% of the total number of equity shares in the paid-up share capital of the Company) at a price of Rs. 98 (Rupees Ninety-Eight only) per equity share (the ‘Buy Back Offer Price’) payable in cash for an aggregate consideration not exceeding Rs. 1,000 Crore (Rupees One Thousand Crore only) (the ‘Buyback Offer Size’) representing 4.11% of the aggregate of the fully paid-up equity share capital and free reserves as per the audited standalone financial statements of the Company for the financial year ended March 31, 2018 (the last audited financial statements available as on the date of Board meeting recommending the proposal of the Buyback) and is within the statutory limits of 10% (Ten Percent) of the aggregate of the fully paid-up equity share capital and free reserves under the board of directors approval route as per the provisions of the Companies Act, 2013 from all the equity shareholders of the Company, as on the record date, on a proportionate basis through a Tender Offer route in accordance the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018 (the ‘Buyback Regulations’) (hereinafter referred to as the “Buyback”), subject to all other applicable statutory approvals.

      The pre-buyback shareholding pattern of the Company as on January 4, 2019 is enclosed as Annexure A to this letter.

      The Board Meeting commenced at 3.00 p.m. and concluded at 6.30 p.m.

    Last to last Year the NMDC Buyback was announced on 07.06.2016. The Buyback was approved by shareholders on 04.08.2016.

    1. Price of Share on 07.06.2016= 92
    2. Buyback Price = 94
    3. Record Date= 19.08.2016
    4. Share Price on Record Date= 107
    5. Letter of Offer announced on 19.09.2016( Entitlement Ratio= 100%)
    5. Buyback Open = 19.09.2016
    6. Buyback Close = 30.09.2016

    So by seeing the Entitlement ratio of 100% on 19.09.2016, all buyback participants must have sold their shares in the market as on 19.09.2016, the share price was 101 because had they wait for buyback the company would have bought at 94 which would be a loss to them.

    Last time buyback size was 80.08 cr fully paid-up equity shares of face value `1 each, for an aggregate consideration not exceeding 7527 cr (the “Buyback Offer Size”).

    The Entitlement ratio was 100% because of the huge size of the buyback. The company in 2016 had 14000 Cr cash in books so they have done this big buyback. However, as on FY18, the company had only 5738 Cr of cash, so this time the size won’t be much bigger.

    Market wizard ji, what is your opinion for buying NMDC share only for buyback purpose at this stage ?

    Pursuant to Regulation 29 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended. and other applicable provisions of law, notice is hereby given that the Meeting of Board of Directors of the Company will be held on Tuesday, 8th January 2019, inter-alia, to consider the proposal for Buy-Back of the fully paid-up equity shares of the Company.

    In pursuance of the Internal Code of Conduct for Prevention of Insider Trading in dealing with Securities of NMDC Limited, the trading window for trading in the equity shares of the Company shall remain closed from 2nd January 20 19 to 10’h January 2019 (both days
    inclusive), in connection with the above-scheduled meeting.