In this article, we will discuss the Coal India Limited Buyback offer, buyback price, buyback size, record date, company financial, buyback necessity and its impact on the company.
Coal India Limited Buyback Details
| Buyback Type | Tender Offer |
| Buyback Opening Date | March 1, 2019 |
| Buyback Closing Date | March 15, 2019 |
| Buyback Offer Amount | Rs. 10,50,00,00,000/- |
| Buyback No. of Shares | 4,46,80,850 |
| Face Value | Rs. 10/- |
| Date of Buyback Approval | February 4, 2019 |
| Date of Public Announcement | February 4, 2019 |
| Buy Back Price | Rs. 235/- |
| Buy Back Premium | 5.83% |
Coal India Buyback Opening and Closing Date
The starting and closing dates of this buyback are NA.
Coal India Buyback Cash Offer
The Cash Offer to Buy-back up to 4,46,80,850 (Four crores forty-six lakhs eighty thousand eight hundred fifty only) fully paid-up equity shares of the Company of face value of Rs. 10 each.
Coal India Buyback Record Date
The decided record date is Friday, February 15, 2019.
Coal India Buyback Price
At a price of Rs. 235/- (Rupees Two hundred thirty-five only) per Equity Share.
Coal India Buyback Size
The Buyback is for an aggregate amount not exceeding Rs. 10,50,00,00,000(Rupees One thousand fifty crores only).
Coal India Buyback Acceptance Ratio
Find profit & profit percentage based on various acceptance rate, The profit is calculated based on 1000 shares.
| Acceptance Ratio | Total Shares Accepted | Buyback Price | Buyback Amount | Profit | Profit% |
| 20% | 200 | 235 | 47000 | 3400 | 1.56% |
| 40% | 400 | 235 | 94000 | 6800 | 3.12% |
| 60% | 600 | 235 | 141000 | 10200 | 4.68% |
| 80% | 800 | 235 | 188000 | 13600 | 6.24% |
| 100% | 1000 | 235 | 235000 | 17000 | 7.80% |
Profit is calculated from 11th Feb 2019 share price i.e. Rs.218 per share of Coal India Limited.
According to the above table, if a shareowner applies for 1000 shares of Coal India Limited & gets 20% acceptance from the company, the owner of this 1000 shares will sell 200 shares @ Rs.235 per share & receive Rs.3400 as profit amount & 1.56% profit percentage on selling these 200 shares back to the company.
Similarly, if the owner gets 60% acceptance of share from the company, the owner will sell 600 shares @ Rs.235 & receive a profit of Rs.10200 @ 4.68% profit percentage.
Coal India Limited Buyback Overview
The Company has a manpower of 2,88,687 as on January 1, 2019. As of January 1, 2019, the Company operated 369 mines in 82 mining areas spread over nine provincial states of India of which 174 are underground mines, 177 are opencast mines and 18 are mixed mines.
The Company also operate 16 coal washeries, (12 coking coal and 4 non-coking coal) and manage other establishments including workshops and hospitals. The Company has 27 training institutes one of them being Indian Institute of Coal Management (IICM) which is an excellent training centre which imparts multi disciplinary management development programmes to our executives, officers and management trainees.
Our major consumers include power and steel companies, cement, fertilizer and brick kilns producers, amongst other industries.
Presently, the Company has nine wholly owned subsidiaries (seven coal producing companies, one service oriented company and one foreign subsidiary company), namely, Bharat Coking Coal Limited, Central Coalfields Limited, Eastern Coalfields Limited, Western Coalfields Limited, South Eastern Coalfields Limited, Northern Coalfields Limited, Mahanadi Coalfields, Central Mine Planning & Design Institute Limited (service oriented company) and Coal India Africana Limitada (overseas subsidiary was incorporated in Mozambique).
The mines of North Eastern Coalfields in Assam are directly managed by the Company.
Company Finances – Coal India Limited
The salient financial information of the Company extracted from the audited standalone financial statement for last three years being March 31, 2018, March 31, 2017, and March 31, 2016, and unaudited limited reviewed financial results for six month period ended September 30, 2018, prepared under IND-AS are given below:
(Rs.in Crore)
| Key Financials | Half yearly results till September 30, 2018 | For the year ended March 31, 2018 | For the year ended March 31, 2017 | For the year ended March 31, 2016 |
| (Unaudited) | (Audited) | (Audited) | (Audited) | |
| Revenue from Operations | 92.54 | 370.37 | 311.18 | 177.16 |
| Other Income | 991.25 | 9,571.03 | 15,004.75 | 17,129.39 |
| Total Income | 1,083.79 | 9,941.40 | 15,315.93 | 17,306.55 |
| Total Expenses (excluding interest & depreciation and amortisation) | 371.74 | 866.29 | 922.97 | 645.74 |
| Interest | 14.45 | -257.86 | -136.23 | -123.80 |
| Depreciation | 8.38 | 18.14 | 17.52 | 16.41 |
| Profit Before Exceptional Items and Tax | 689.22 | 9,314.83 | 14,511.67 | 16,768.20 |
| Exceptional Items: Expense / (Income) | – | – | – | – |
| Profit Before Tax | 689.22 | 9,314.83 | 14,511.67 | 16,768.20 |
| Provisions for Tax (including Deferred Tax) | 9.50 | 21.41 | 11.14 | 175.20 |
| Profit/(Loss) discontinuing operation | – | – | – | – |
| Share in JV’s/Associates profit/(loss) | – | – | – | – |
| Profit/ (Loss) for the period | 679.72 | 9,293.42 | 14,500.53 | 16,593.00 |
| Other Comprehensive Income | 0.44 | 5.36 | 3.40 | -13.44 |
| Total Comprehensive Income | 680.16 | 9,298.78 | 14,503.93 | 16,579.56 |
| Paid-up Equity Share Capital | 6,207.41 | 6,207.41 | 6,207.41 | 6,316.36 |
| Reserve & Surplus net of Miscellaneous expenditures to the extent not written off excluding revaluation reserves and capital reserves | 7,167.46 | 6,487.30 | 7,712.39 | 9,729.45 |
| Net worth excluding revaluation reserves, capital reserves and net of Miscellaneous expenditures to the extent not written off | 13,374.87 | 12,694.71 | 13,919.80 | 16,045.81 |
| Total Debt, excluding working capital loans | – | – | – | – |
Coal India Limited Buyback Dates
| Date of the Board meeting held to approve the proposal for Buy-back of Equity Shares | Monday, February 4, 2019 |
| Date of publication of Public Announcement for the Buy-back | Wednesday, February 6, 2019 |
| Record Date for determining the Buy-back Entitlement and the Eligible Shareholders | Friday, February 15, 2019 |
| Buy-back opens on / Buy-back Opening Date | Friday, March 1, 2019 |
| Buy-back closes on / Buy-back Closing Date | Friday, March 15, 2019 |
| Last date of verification by Registrar to Buy-back | Monday, March 18, 2019 |
| Last date of intimation to the Stock Exchange regarding acceptance or non-acceptance of tendered Equity Shares by the Registrar and Manager to the Buy-back | Wednesday, March 20, 2019 |
| Last date of settlement of bids on the Stock Exchange | Friday, March 22, 2019 |
| Last date of return of unaccepted demat shares by Stock Exchange to Seller Member / Broker | Friday, March 22, 2019 |
| Last date of extinguishment of Equity Shares bought back | Monday, March 25, 2019 |
Necessity of Coal India Limited Buyback
The Buyback is being undertaken by the Company to return surplus funds to its Shareholders. Additionally, the Company’s management strives to increase Shareholders’ value and the Buyback would result inter alia in the following:
- The Buyback involves allocation of higher number of equity shares as per their entitlement or 15% of the number of equity shares which the Company proposes to Buyback reserved for small shareholders. The Company believes that this reservation for small shareholders would benefit a large number of public Shareholders, who would get classified as “Small Shareholders;
- The Buyback may help in improving return on equity, by reduction in the equity base, and other financial ratios, thereby leading to long term increase in Shareholders’ value; and
- The Buyback gives an option to the Eligible Shareholders to either participate in the Buyback and receive cash in lieu of equity shares accepted under the Buyback or not participate in the Buyback and enjoy a resultant increase in their percentage shareholding in the Company post the Buyback without any additional investment.
Impact of Coal India Limited Buyback on the Company
We believe that the Buyback is not likely to cause any impact on the profitability or earnings of the Company, except to the extent of reduction in the amount available for investment, which the Company could have otherwise deployed towards generating investment income.
Assuming the response to the Buyback is to the extent of 100% (full acceptance) from all the Eligible Shareholders upto their entitlement and to the extent the Promoter has agreed to tender, the aggregate shareholding and the voting rights of the Promoter of the Company, may [increase/decrease] to [●]% post Buyback from the current pre Buyback shareholding of 72.91%, and the aggregate shareholding of the public shareholders in the Company may [increase/decrease] to [●]% post Buyback from the current pre Buyback shareholding of 27.09%.
The debt-equity ratio post Buyback on a standalone as well as consolidated basis will be compliant with the permissible limit of 2:1 prescribed under Section 68(2)(d) of Companies Act and Regulation 4(ii) of the Buyback Regulations, even if the response to the Buyback is to the extent of 100% (full acceptance) from all the Eligible Shareholders upto their Buyback Entitlement.
Salient financial parameters consequent to the Buyback based on the last audited standalone and consolidated financial statements of the Company for the financial year ended March 31, 2018 are as under:
| Parameters | Standalone | Consolidated | ||
| Pre- Buyback | Post Buyback | Pre- Buyback | Post Buyback | |
| Net worth (Rs. in Crore) | 12,694.71 | 11,644.71 | 19,827.36 | 18,777.36 |
| Return on Net worth (%) | 73.25 | 79.85 | 38.60 | 40.76 |
| Earnings Per Share (of Rs. 10 each) | 14.97 | 15.08 | 11.31 | 11.39 |
| Book Value per Share (Rs.) | 20.45 | 18.90 | 31.94 | 30.47 |
| P/E as per the latest audited financial results | 18.92 | 18.79 | 25.05 | 24.87 |
| Total Debt/ Equity Ratio | – | – | 0.08 | 0.08 |
Basis of Calculating Coal India Buyback Price
The Buyback Price has been arrived at after considering many factors, including, but not limited to, the trends in the volume weighted average market prices of the Equity Shares of the Company on the Stock Exchanges where the Equity Shares of the Company are listed, the net worth of the Company, price earnings ratio, impact on other financial parameters and the possible impact of Buyback on the earnings per Equity Share.
More on Coal India Buyback Price Calculation
Further, the Buyback Price of Rs. 235/- (Rupees two hundred and thirty five only) per Equity Share represents:
- A premium of 3.47% and 3.49% over the volume weighted average market price of the Equity Shares on the BSE and on the NSE respectively for two weeks preceding the date of intimation to the Stock Exchanges for the Board Meeting to consider the proposal of the Buyback, i.e. January 30, 2019, and
- A premium of 4.24% and 4.35% over the closing market price of the Equity Shares on BSE and NSE respectively, as on the date of the intimation to the Stock Exchanges for the Board Meeting to consider the proposal of Buyback, i.e. January 30, 2019, and
- A premium of 5.26% and 5.29% over the closing market price of the Equity Shares on BSE and NSE respectively, as on the date preceding the Board Meeting to consider the proposal of Buyback.
Source of Funds for the Buyback
The Buyback would be financed out of free reserves and/or such other sources as may be permitted by law through “Tender Offer” route and as required by the Buyback regulations and the Companies Act, and on such terms and conditions as the Board may deem fit.
The Company shall transfer from its free reserves a sum equal to the nominal value of the equity shares bought back through the Buyback to the Capital Redemption Reserve Account and the details of such transfer shall be disclosed in its subsequent audited financial statements.
The Company has confirmed that the funds for the Buyback will be made available out of its internal accruals and not out of funds borrowed, if any, from banks and financial institutions
Coal India Limited – Manager to the Buyback
| IDBI Capital Markets & Securities Limited 6th Floor, IDBI Tower, WTC Complex, Cuffe Parade, Mumbai – 400 005, Maharashtra, India Tel: +91 (22) 22171700 Fax: +91 (22) 22151787 Contact Person: Mr. Sumit Singh Email: [email protected] Website: www.idbicapital.com SEBI Registration Number: INM000010866 Validity Period: Permanent CIN: U65990MH1993GOI075578 |
Coal India Limited – Registrar to the Buyback
| Alankit Assignments Limited 205 – 208, Anarkali Complex, Jhandewalan Extension, New Delhi – 110055 Tel: +91 (11) 42541971, +91 (11) 42541958 Fax: +91 (11) 23552001 Contact Person: Mr. Abhinav Agarwal / Mr. Lalita Prasad Email: [email protected] Website: www.alankit.com SEBI Registration Number: INR000002532 Validity Period: Permanent CIN: U74210DL1991PLC042569 |
Coal India Limited Contact Details
| Company Contact Details |
| Coal India Limited Corporate Identification Number (CIN): L23109WB1973GOI028844 Registered Office: Premises no-04-MAR, Plot no-AF-III, Action Area-1A, Newtown, Rajarhat, Kolkata 700156 Tel.: +91 (33) 23246526 Fax: + 91 (33) 23246510 Website: www.coalindia.in E-mail: [email protected] Contact Person: Mr. M. Viswanathan, Company Secretary and Compliance Officer |
Coal India Limited Buyback News
News 1 – Buyback PDF / Letter of Offer [Download]
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