In this article, we will discuss the NMDC Limited Buyback offer, buyback price, buyback size, record date, company financial, buyback necessity and its impact on the company.

NMDC Limited Buyback Details

Buyback TypeTender Offer
Buyback Opening DateFebruary 13, 2019
Buyback Closing DateFebruary 27, 2019
Buyback Offer AmountRs. 10,00,00,00,000/-
Buyback No. of Shares10,20,40,815
Face ValueRe. 1/-
Date of Buyback ApprovalJanuary 8, 2019
Date of Public AnnouncementJanuary 8, 2019
Buy Back Price Rs. 98/-
Buy Back Premium2.35%

NMDC Buyback Opening and Closing Date

The starting and closing dates of this buyback are from February 13, 2019, to February 27, 2019.

NMDC Buyback Cash Offer

The Cash Offer to Buy-back up to 10,20,40,815 (Ten crores twenty lakhs forty thousand eight hundred fifteen only) fully paid-up equity shares of the Company of face value of Re. 1 each.

NMDC Buyback Record Date

The decided record date is Friday, January 18, 2019.

NMDC Buyback Price

At a price of Rs. 98/- (Rupees Ninety eight only) per Equity Share.

NMDC Buyback Size

The Buyback is for an aggregate amount not exceeding Rs. 10,00,00,00,000 (Rupees One thousand crores only).


NMDC Buyback Acceptance Ratio

Find profit & profit percentage based on various acceptance rate, The profit is calculated based on 1000 shares.

Acceptance RatioTotal Shares AcceptedBuyback PriceBuyback AmountProfitProfit%
20%
40%
60%
80%
100%

Profit is calculated from 12th May 2019 share price i.e. Rs.54.15 per share of NMDC Limited.

According to the above table, if a share owner applies for 1000 shares of NMDC Limited & gets 20% acceptance from the company, the owner of this 1000 shares will sell 200 shares @ Rs.56 per share & receive Rs.370 as profit amount & 0.68% 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.56 & receive a profit of Rs.1,110 @ 2.05% profit percentage.


NMDC Limited Buyback Overview

The Company has been accorded the status of Schedule-A Public Sector Company. In recognition to the Company’s growing status, the Company has been categorized by the Department of Public Enterprises as “NAVRATNA” Public Sector Enterprise in 2008.

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

The Company is India’s one of the largest iron ore producer by volume, presently producing about 30 million tonnes of iron ore from its 3 fully mechanized iron ore projects viz., Kirandul Complex (Deposit -14, 11C & 11B, Bacheli Complex (Deposit-5 & 10/11A) of Chhattisgarh State and Donimalai Complex (Donimalai and Kumaraswamy of Karnataka State).


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Company Finances – NMDC Limited

The salient standalone financial information of the Company, as extracted from the audited results for the last three financial years and limited review financials for nine months period ended December 31, 2018, is detailed below:

(Rs.in Crore)

Key FinancialsFor Six Months
Period ended
September 30,2018
For the year
ended March
31, 2018
For the year
ended March
31, 2017
For the year
ended March
31, 2016
(Limited Review)(Audited)(Audited)(Audited)
Revenue from Operations4859.9111614.918829.646457.27
Other Income256.09519.73908.811809.25
Total Income5116.0012134.649738.458266.52
Total   Expenses   (excluding   interest   &
depreciation)
2176.605806.145227.833706.79
Interest20.4637.1020.7665.59
Depreciation129.10256.04196.18216.60
Exceptional Items: Expense/(Income)(144.30)184.78
Profit Before Tax2789.846179.664,293.684,092.76
Provisions for Tax (including Deferred
Tax)
1,178.022,373.341,704.041,380.05
Profit/(Loss) discontinuing operation(0.18)(0.44)(0.50)(0.49)
Profit/ (Loss) After Tax1,611.643805.882589.142,712.22
Paid-up Equity Share Capital316.39316.39316.39396.47
Reserve & Surplus, excluding revaluation
reserves  &  Misc.  expenditures  to  the
extent not written off
25,673.1124,037.4422,202.5528,721.12
Net worth, excluding revaluation reserves
& Misc. expenditures to the extent not
written off
25,989.5024,353.8322,518.9429,117.59
Total  Debt,  excluding  working  capital
loans
0000

NMDC Limited Buyback Dates

Date of the Board meeting held to approve the proposal for Buy-back of Equity SharesTuesday, January 8, 2019
Date of publication of Public Announcement for the Buy-backThursday, January 10, 2019
Record Date for determining the Buy-back Entitlement and the Eligible ShareholdersFriday, January 18, 2019
Buy-back opens on / Buy-back Opening DateWednesday, February 13, 2019
Buy-back closes on / Buy-back Closing DateWednesday, February 27, 2019
Last date of verification by Registrar to Buy-backTuesday, March 5, 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-backWednesday, March 6, 2019
Last date of settlement of bids on the Stock ExchangeThursday, March 7, 2019
Last date of return of unaccepted demat shares by Stock Exchange to Seller Member / BrokerThursday, March 7, 2019
Last date of extinguishment of Equity Shares bought backMonday, March 11, 2019


Necessity of NMDC Limited Buyback

The objective is to return surplus cash to the members holding equity shares of the Company. Buyback is a more efficient form of returning surplus cash to the members holding equity shares of the Company, inter-alia, for the following reasons:

  • The Buyback will help the Company to return surplus cash to its members holding equity shares broadly in proportion to their shareholding, thereby, enhancing the overall return to members;
  • The Buyback, which is being implemented through the Tender Offer route as prescribed under the Buyback Regulations, would involve allocation of higher of number of shares as per their entitlement or 15% of the number of shares to be bought back, reserved for the 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 shareholder”;
  • The Buyback may help in improving return on equity;
  • Optimizes the capital structure.

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Impact of NMDC Limited Buyback on the Company

We believe the Buyback is not likely to cause any material impact on the profitability/ earnings of the Company. The Buyback is expected to contribute to the overall enhancement of shareholder value and result in an increase in the return on equity of the Company.

The debt-equity ratio post Buyback will be compliant with the permissible limit of 2:1 prescribed by Section 68 of the 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).

ParametersPre-BuybackPost-Buyback
Networth (Rs.) (in crores)24,353.8323,353.83
Return on Networth (%)15.6316.30
Earnings per Share (Rs.)12.0312.43
Book Value per Share (Rs.)76.9776.27
P / E as per the latest audited financial results*9.859.54
Total Debt / Equity Ratio00

Basis of Calculating NMDC Buyback Price

The Buyback Offer price of Rs. 98/- (Rupees Ninety Eight only) per Equity Share has been arrived at after considering various factors such as the average closing prices of the Equity Shares on the Stock Exchanges where the Equity Shares of the Company are listed, the net-worth of the Company and the impact of the Buyback on the key financial ratios of the Company.

More on NMDC Buyback Price Calculation

The Buyback Offer Price of Rs. 98/- (Rupees Ninety Eight Only) per Equity Share represents:

  • Premium of 2.70% on BSE and 2.82% on NSE over the volume weighted average price of the equity Shares on BSE and NSE respectively for 2 weeks preceding the date of intimation to the BSE and NSE for the Board Meeting to consider the proposal of the Buyback;
  • Premium of 2.35% on BSE and 2.35% on NSE over the closing market price of the Equity Shares on BSE and NSE on the date of intimation to BSE and NSE i.e. January 1, 2019.

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Source of Funds for the Buyback

The Buyback shall be made out of the free reserves of the Company as at March 31, 2018 (i.e. the last audited standalone financial statements available as on the date of Board Meeting recommending the proposal of the Buyback).

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 balance sheet.

The fund requirement for the Buyback will be met out of internally generated cash resources of the Company. The Company does not intend to raise additional debt for the explicit purposes of the Buyback. Accordingly, borrowed funds will not be used for the Buyback. However, if required, the Company may borrow funds in the ordinary course of its business.


NMDC Limited – Manager to the Buyback

IDBI CAPITAL MARKETS & SECURITIES LIMITED
6th floor, IDBI Tower, WTC Complex, Cuffe Parade, Mumbai 400 005;
Contact Person: Sumit Singh;
Tel No.:+91 (22) 2217 1700;
Fax No.: +91 (22) 2215 1787;
Email:nmdc.buyback@idbicapital.com;
Website: www.idbicapital.com
SEBI Registration Number: INM000010866;
Validity Period: Permanent
Corporate Identity Number: U65990MH1993GOI075578

NMDC Limited – Registrar to the Buyback

AARTHI CONSULTANTS PVT. LTD.
1-2-285, Domalguda, Hyderabad 500 029;
Contact Person: G. Bhaskara Murthy;
Tel.: +91 (40) 2763 8111/2763 4445
Fax.: +91 (40) 2763 2184
Email:info@aarthiconsultants.com/
bhaskar@aarthiconsultants.com;
Website: www.aarthiconsultants.com
SEBI Registration Number: INR000000379
Validity Period: Permanent
CIN: U74140TG1992PTC014044

NMDC Limited Contact Details

Company Contact Details
NMDC Limited
(A Government of India Enterprise)
Registered Office: Khanij Bhavan, 10-3-311/A, Castle Hills, Masab Tank, Hyderabad-500028
CIN: L13100AP1958GOI001674
Contact Person: Shri A S Pardha Saradhi , Company Secretary
Tel: 040-23538757 |Fax: 040-23538759
|Email: cs@nmdc.co.in |Website: www.nmdc.co.in

 


NMDC Limited Buyback News

News 1 – Buyback PDF [Download]


FAQs of NMDC Limited Buyback

What is the NMDC Limited Buyback Period?

NMDC Limited Buyback Period is briefly the time interval starting from date of declaration of results of the postal ballot through remote e-voting i.e. January 10, 2019. The period basically ends on the date of payment of consideration to Eligible Shareholders who participated in the Buyback, i.e. March 7, 2019.

What type of buyback is NMDC Limited Buyback?

This company has chosen the route of Tender offer to repurchase the shares from the eligible shareholders. Tender offer route is one of the Two Routes generally chosen by the companies, i.e. Tender Offer Through Stock Exchanges.

What is the NMDC Limited Buyback Offer?

NMDC Limited Buyback Offer refers to the number of shares the company plans to buy back from the eligible shareholders. Herein, the company proposes to buyback 10,20,40,815 Fully paid up Equity shares, adhering to the buyback price.

When NMDC Limited Buyback offer will start?

As per the released schedule, the NMDC Limited Buyback offer will start on February 13, 2019. This is the opening date from when the Buyback will open for all shareholders. You will find the updated records of NMDC Limited Buyback at all times, we ensure you have access to the right data.

When is the closing date of NMDC Limited Buyback?

For the ease in access to the dates and related aspects, we have segregated the closing date of NMDC Limited Buyback. The buyback would stay open from February 13, 2019, and would close on February 27, 2019. The closing date is the last day for which the Buyback shall be open for the shareholders.

What is the offer price for NMDC Limited Buyback?

The amount at which the shares are taken back by the company is referred to as NMDC Limited Buyback offer price. Herein, each and every fully Paid-up equity share is priced at Rs.98, the price paid to each eligible shareholder.

What is the record date for NMDC Limited Buyback offer?

Record date of NMDC Limited Buyback is January 18, 2019. Record date is generally the day when eligible shareholders are declared. Furthermore, complying with Buyback regulations, letter of offer and Tender form is sent to the eligible shareholders.

What is the issue size of NMDC Limited Buyback?

NMDC Limited Buyback Size is Rs.10,00,00,00,000 and is the total worth of Equity Shares the company plans on taking back. This amount is obtained from the total number of equity shares, multiplied by the Buyback price.

What is the necessity for NMDC Limited Buyback?

Objective of the NMDC Limited Buyback is to enhance the total return made by equity shareholders. Herein, the excessive funds are given to the equity shareholders, which are over and above its ordinary capital requirements and in excess of any current investment plans. Through buyback, company will distribute the surplus cash to shareholders as per their holding proportion.

Who is the Registrar to NMDC Limited Buyback offer?

Designated registrar of NMDC Limited Buyback is AARTHI CONSULTANTS PVT. LTD. You can find all the details related to the registrar in this report and contact them if you have any queries. You can check the details of the registrar, contact person, email address and more.

Who is the Manager to the NMDC Limited Buyback offer?

Manager to the NMDC Limited Buyback is IDBI CAPITAL MARKETS & SECURITIES LIMITED. Manager basically ensures that the company following up buyback strictly adheres to and in conformity with the provisions of the Companies Act and Buyback Regulations.

How to check NMDC Limited buyback acceptance ratio?

Acceptance ratio is basically the proportion of shares the company accepts, to the final number of shares tendered. It refers to how much the company would buyback and how profitable it would be for you. You can also check how much profit (%) you will earn. Click on the link and check on the website page.

Where to find NMDC Limited Buyback Dates / Events?

You can check the table for the list of events, as designed for the buyback. This article is your one and final destination to check all the NMDC Limited Buyback information. You will encounter a section exclusively set to record the dates, in this article, referred to as NMDC Limited Buyback Dates.

What can be the Impact of NMDC Limited Buyback on the Company?

The Buyback will not in any manner impair the ability of the Company to pursue growth opportunities or meet its cash requirements for business operations. The Buyback is expected to contribute to the overall enhancement of shareholder value and result in an increase in the return on equity of the Company. This Buyback is being undertaken, inter alia, for helping the Company to return surplus cash to the Eligible Shareholders broadly in proportion to their shareholding.

Where to find complete details on NMDC Limited Buyback?

As mentioned already, this page would give you every single detail about this buyback. Also, you find the link to download Draft / Letter of Offer. Each and every section is vividly and carefully placed, giving you insights into all major as well as minor aspects of the ratio. The article is also inclusive of all the links.

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