Tech Mahindra Limited Buyback Offer 2019

Tech Mahindra represents the connected world, offering innovative and customer-centric information technology experiences, enabling Enterprises, Associates and the Society to Rise™.

They are a USD 4.9 billion company with 121,840+ professionals across 90 countries, helping over 935 global customers including Fortune 500 companies. The convergent, digital, design experiences, innovation platforms and reusable assets connect across a number of technologies to deliver tangible business value and experiences to our stakeholders. Tech Mahindra is the highest ranked Non-U.S. company in the Forbes Global Digital 100 list (2018) and in the Forbes Fab 50 companies in Asia (2018).

They are a part of the USD 21 billion Mahindra Group that employs more than 200,000 people in over 100 countries. The Group operates in the key industries that drive economic growth, enjoying a leadership position in tractors, utility vehicles, after-market, information technology, and vacation ownership.

Buy Back Offer Deal:

Buyback Type: Tender Offer
Buyback Record Date: Mar 06 2019
Buyback Opening Date: Mar 25 2019
Buyback Closing Date: Apr 05 2019
Date of Board Meeting approving the proposal: Feb 21 2019
Date of Public Announcement: Feb 21 2019
Buyback Offer Size: 2.10%
Buyback Number of Shares: 20,585,000
Price Type: Tender Offer
FV: 5
Buyback Price: ₹ 950 Per Equity Share

Details of Buyback:

Approved the proposal to the buyback of not exceeding 20,585,000 equity shares (representing 2.10% of the total number of equity shares in the paid-up share capital of the Company) at a price of Rs. 950 per equity share (the "Buy Back Offer_Price") payable in cash for an aggregate consideration not exceeding Rs. 1,956 Crore (the "Buyback Offer Size") through " Tender Offer".

How to Participate in buyback?

1. Firstly, to be eligible for the buyback the investor should have shares of Tech Mahindra Buyback 2019 in demat or physical form as on the record date [06.03.2019 ]. 2. Once you have shares in demat, you can participate in the buyback process which is opening from [ 25.03.2019 to 05.04.2019 ] by selling your shares through your broker on NSE or BSE. 3. Then on [16.04.2019], 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 210 Shares at CMP of Rs. 830 [2,00,000/950=210)
Acceptance Ratio 33% 50% 75% 100%
Amount Invested in Buyback 1,74,300 1,74,300 1,74,300 1,74,300
No. of Shares buyback 69 105 157 210
BuyBack Profit 8280 12600 18840 25200
Profit 5% 7% 11% 14%

Recommendation:

Review and Recommendation of Tech Mahindra Limited Buyback Offer 2019  by IZ team is: 4/10 Fair: 1-5 Good: 5-7 Excellent: 7-10 [ Good arbitrage of 15% from CMP. However, the size of the buyback is small. The buyback Entitlement based on Annual Report (2-17-18) data would be close to 10-15%. However, this will vary as per price movement. The company this quarter has given excellent results. So fundamentally there is no risk in the company at present. ]

Company Contact Details:

Registered Office: Gateway Building, Apollo Sunder Mumbai 400 001, India CIN L64200MH1986PLC041370

    Hi, I have submitted application for buy back and the shares are also deducted from my demat account but I am yet to receive the amount. May I know if someone has also still waiting to get the amount credited? I have posted the form through registered post to the registrar. Who should I contact for inquiries?

    Thanks

    I applied for Buyback. I got a message yesterday that my Tech Mahindra shares are deducted from DP. but the money is not credited till now on my Bank account. What would I do? is it a general scenario. when can I expect the money is going to credit on my bank account. 🙂

      Shares deducted will be tendered for buyback. You will receive the amount for the accepted shares in your bank account. Unaccepted shares will be credited back to your demat account. The process may take a week to complete. Exact date of settlement could be found in the offer letter.

    I have 300 shares of tech Mahindra and I have not received any mail from tech Mahindra as of how much I have been allotted

    I have 100 shares tech mahindra.. So how many shares will the company take in the buyback.

    If i purchase share after today, whether i can participate in buyback???

    If i purchase share after today, whether i can participate in buyback?

    When is final acceptance or rejection will be finally announced ?
    What date they will deposit money in account ?
    Will it be 2% or more buyback

      It will be announced on 12.04.2019. The AR would be 20%.

      Acceptance ration is what are the chances of acceptance of your share.
      Example. if you have 100 number of Tech Mahindra share. on Buyback company, it may or may not accept your share as the buyback. How many accept if it expects 10 number of share it 10%. as you have 100 shares.

    i have 123 shares of tech mahindra on record date and entitled for 123 shares . After record date i have purchased 10 more shares of tech mahindra so it reflect in my demate account 133 shares. By mistake I have tendered 133 shares as per my demate account instead of 123 shares for which I entitled . my question is that can company reject my bid on the base of share quantity which i tendered is not as per record date . please reply and guide me.

      Nothing should happen. They will count a number of shares you were holding in Record date.

      If you are eligible for buyback techmah will send u the mail with the quantity of sahres eligible for buyback. pls chk ur mail.

    by mistake i have tendered 133 shares while i have 123 shares on record date what to do to correct tendered quantity

    I have 24 shares of Tech Mahindra in my demat. I want to exercise the Buyback option. Could you please guide me how can I do that. I am a layman and have never exercised such options. Any help in this regards will be highly appreciated.

    Hi Expert,
    I am not in India and came to know about this buyback through email few days back. My demat account I am not sure is active or not.

    I have 65 shares @400. Is it a good idea to go for buyback? 950 looks good price.

    please advise. What should i do?

    Thanks

      Please intimate your residence status?

      If you are an NRI, then

      a) Applicable to all Non-resident shareholders. I/We undertake to pay income taxes in India on any income arising on such Buyback and taxable in accordance with prevailing income tax laws in India within 7th day of the succeeding months in which the Shares are bought back by the Company. I/We also undertake to indemnify the Company against any income tax liability on any income earned on such Buyback of shares by me/us.

      b) I / We, being a Non-Resident Shareholder, agree to obtain and submit all necessary approvals, if any and to the extent required from the concerned authorities including approvals from the Reserve Bank of India (“RBI”) under Foreign Exchange Management Act, 1999, as amended (the “FEMA Regulations”) and the rules and regulations framed thereunder, for tendering Equity Shares in the Buyback, and also undertake to comply with the reporting requirements, if applicable, under the FEMA Regulations and any other rules, regulations and guidelines, in regard to remittance of funds outside India.

      You should definitely participate in the buyback.

    Hi All,

    I have shares in demat form in a holding account – Oriental Bank Of Commerce. How do I apply for the buyback through this?

    If it keeps on falling like this – it will be a proposition of loss. I bought it just for buyback gains.

    Hi All,
    I am new to buy back and sharemarket ;
    I only have 2 shares of techM; and i received buyback mail with 0 entitlement for Buyback.
    Does that mean i cannot apply for Buyback?

      You can tender 2 shares.
      Entitled shares means no. of shares confirmly accepted from you.
      0 entitlement means no assurance that your shares will be always accepted, acceptance will depend on total entitled shares tendered by retailers.

    Can I know how much shares have been allotted for buy back of tech Mahindra Ltd pls email me

    Since IT sector will be weak for sometime, retail investors are advised to sell your shares as the buyback date is now over. You may keep 20% in your demat which will be likely maximum acceptance ratio, or that also you can buy before actual buyback process starts.

      Acceptance ratio you mentioned is calculated based on the shares as on record date or 20% of shares what you tendered which sometimes less than the numbers on record date.

    Today is Record Date for Buyback. Please ensure today’s valuation EOD below 2 lakhs to participate in reserved category (small shareholder) @ NSE closing price (assuming highest volume in NSE)
    Make sure shares lying in your DeMat Account and not in Brokers Pool/Margin Account

    I bought 60 shares of Tec Mahindra on 1 March. Record date is 6 March. 2 to 5 March were holidays. Will these shares be eligible for buyback? The shares come to my account by 8.30 pm on 6 March as per icicidirect.com

    Dear MW,
    we all appreciate your efforts to provide excellent info. on buyback issue…but you have missed some co. even if it is small in size to enclose in your list eg P MB Polytex who declared BB on 21.2.19. RD on 8 .03.19. @80 per share. Pls. Include each and every co. In your list…still handoff to you.

      Hello Pankaj Jii,

      Thanks for your appreciation!!

      I would like to clarify that I tend to cover only the big size issue as they have more chances of making money. The big companies use a method of buyback to Reward the Investors which is not in case of small issues. Small Issue mostly has different motives i.e. to delist the company, the promoters often siphon off the reserve by way of Buyback etc.

      There is no harm in avoiding such companies. I always prefer to play safely in the market. If everybody must satisfy for a 10-15% return in the market then nobody will lose money. However, it is the only greed which makes loose money in the market.

    I had tendered shares…
    But it is not on demat at record date.. So it was debited but not yet credited back..what to do?

      To whom you have tendered Shares? The Buyback is yet to open.

        Strategy is good but is requires capital over 11 lacs to execute. Returns not that attractive on the capital deployed.

      Yes sir..talking abt any company..if aisa ho to?..

      I had problem in bosch..but now i got confirmation by my broker that till today evening i will get my tendered shares back.

      Very Good Strategy please go through it. If any doubt they can ping up here.

      Future position will have to be squared off in March
      While tendering process is normally at least after 1 month from record date

      Hi,

      What do you suggest for Quick heal Buyback? Should we buy it before BM or after BM?

      Very bad strategy by Anand Rathi. You block around 10 lac rupees for one month.

    Kindly inform what are the charges if we tender shares online? Or from tender forms?

    Is there any difference?

      It depends on your broker

      Zerodha takes charges for placing buyback order, Rs. 20 + GST if order placed online & Rs. 100 + GST if order placed manually (by ticket)

      ICICIDirect dont take any charge for placing buyback order

      Brokerages (including duties & taxes) will be charged on accepted shares by every broker.

    The Board of Directors of Tulive Developers at its meeting held on 22 February 2019 approved the buyback of upto 4,80,000 Equity Shares of the Company of the face value of Rs. 10 each at a price of Rs. 350 per Equity Share aggregating up to Rs 16.80 crore .

    The Board has interalia approved the buyback of upto 1530000 (Fifteen Lacs Thirty Thousand Only) Equity Shares of the Company (the Equity Shares) of the face value of Rs. 10 each at a price of Rs. 29/- per Equity Share aggregating to Rs. 44370000/- (Rupees Four crore forty three lacs seventy thousand only) through the Tender Offer route

    If it stays steady 1-2% profit
    If it slips 10% almost 10% loss
    Already at 52 week high so less chnces of further upside in short term

    Forwarded as received:

    Tech Mahindra Buyback offer details:
    • Size: INR 1,956 crore
    • Price: INR 950/share
    • Record Date: 6th March 2019
    • Ex-date : 5th March 2019
    • CMP (based on price of 21st February 2019): INR 826/share
    • Premium: INR 124/share (15%)
    • Total number of shares to be bought back: 2.06 crore shares (2.1% of paid-up equity)
    • Shares reserved for small shareholders: ~ 0.3 crore shares (15% of buyback offer)
    • Based on Buy Back price of INR950, one can buy upto 211 shares (2,00,000/950) to be eligible for Retail category

    Shareholding distribution as per FY2018 annual report (as on March 31, 2018)
    No. of shares % of shareholding
    Upto 500 3.32%
    501-2,000 2.04%
    2001-10,000 1.85%
    10,000 and above 92.79%
    Total 100.00%
    Source: Company FY18 Annual Report

    • The retail holding (upto 500 shares) in TechM was 3.32% (as on March 31, 2018)
    • 15% reservation for the buyback of 2.1% of paid-up equity implies at least 0.31% of paid up equity will be bought from retail investors
    • Acceptance ratio =0.31/3.32 = 9.5% (as on March 31, 2018)

    Given the high retail shareholding, we expect acceptance ratio to be within 15-20% range, which should yield 2.3%-3.0%. This can change based on the shareholding as on the record date.

    Scenario Analysis: If one assumes that we are able to exit the un-tendered shares at CMP of INR826, ex-buyback:
    Amount invested (Rs.) Acceptance ratio Profit (Rs.) Profit (%)
    1,73,859 10% 2,611 1.5%
    1,73,859 15% 3,916 2.3%
    1,73,859 20% 5,221 3.0%
    1,73,859 25% 6,526 3.8%

    Key risks to the opportunity:
    • Additional retail shareholders buy the stock before the record date leading to lower acceptance ratio
    • The current market price (assumed for calculation of profits) drops before one is able to exit post buy back

    As per Dec 2018 shareholding data

    the minimum entitlement ratio would be 4.45%.

      At present 10%. However, it will vary depending upon the price movement.

    Tech_mahindra approved the proposal for buyback by the Company of its own fully paid equity shares of Rs. 5/- each (“Equity Shares”) not exceeding 20,585,000 Equity Shares at a price of Rs 950/Sh

      If there is Open market buyback, Mahindra promoters wouldn’t get any share. I guess it will not be situation. They hold > 35% stake in Tech M.

      Infosys had only 12-13% promoter holdings .. 🙂

    After Very good Quarterly results, expect a 20% upside from here on. The buyback will boost the share price. Risk savvy investors can look to buy at current level.

    You are right MW. The big question is whether company will go for open route or else tender offer. Because open market method will not favor retail investors.

    Big Question is whether it would be Open Market similar to Persistent, Cyient, and Infosys or Tender Offer.