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 Type||Tender Offer|
|Buyback Opening Date||February 13, 2019|
|Buyback Closing Date||February 27, 2019|
|Buyback Offer Amount||Rs. 10,00,00,00,000/-|
|Buyback No. of Shares||10,20,40,815|
|Face Value||Re. 1/-|
|Date of Buyback Approval||January 8, 2019|
|Date of Public Announcement||January 8, 2019|
|Buy Back Price||Rs. 98/-|
|Buy Back Premium||2.35%|
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 Ratio||Total Shares Accepted||Buyback Price||Buyback Amount||Profit||Profit%|
Profit is calculated from 12th May 2019 share price i.e. Rs.90 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.98 per share & receive Rs.1600 as profit amount & 1.78% 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.98 & receive a profit of Rs.4800 @ 5.33% 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).
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:
|Key Financials||For Six Months|
|For the year|
|For the year|
|For the year|
|Revenue from Operations||4859.91||11614.91||8829.64||6457.27|
|Total Expenses (excluding interest &|
|Exceptional Items: Expense/(Income)||–||(144.30)||–||184.78|
|Profit Before Tax||2789.84||6179.66||4,293.68||4,092.76|
|Provisions for Tax (including Deferred|
|Profit/(Loss) discontinuing operation||(0.18)||(0.44)||(0.50)||(0.49)|
|Profit/ (Loss) After Tax||1,611.64||3805.88||2589.14||2,712.22|
|Paid-up Equity Share Capital||316.39||316.39||316.39||396.47|
|Reserve & Surplus, excluding revaluation|
reserves & Misc. expenditures to the
extent not written off
|Net worth, excluding revaluation reserves|
& Misc. expenditures to the extent not
|Total Debt, excluding working capital|
NMDC Limited Buyback Dates
|Date of the Board meeting held to approve the proposal for Buy-back of Equity Shares||Tuesday, January 8, 2019|
|Date of publication of Public Announcement for the Buy-back||Thursday, January 10, 2019|
|Record Date for determining the Buy-back Entitlement and the Eligible Shareholders||Friday, January 18, 2019|
|Buy-back opens on / Buy-back Opening Date||Wednesday, February 13, 2019|
|Buy-back closes on / Buy-back Closing Date||Wednesday, February 27, 2019|
|Last date of verification by Registrar to Buy-back||Tuesday, 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-back||Wednesday, March 6, 2019|
|Last date of settlement of bids on the Stock Exchange||Thursday, March 7, 2019|
|Last date of return of unaccepted demat shares by Stock Exchange to Seller Member / Broker||Thursday, March 7, 2019|
|Last date of extinguishment of Equity Shares bought back||Monday, 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.
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).
|Networth (Rs.) (in crores)||24,353.83||23,353.83|
|Return on Networth (%)||15.63||16.30|
|Earnings per Share (Rs.)||12.03||12.43|
|Book Value per Share (Rs.)||76.97||76.27|
|P / E as per the latest audited financial results*||9.85||9.54|
|Total Debt / Equity Ratio||0||0|
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.
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;
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
SEBI Registration Number: INR000000379
Validity Period: Permanent
NMDC Limited Contact Details
|Company Contact Details|
(A Government of India Enterprise)
Registered Office: Khanij Bhavan, 10-3-311/A, Castle Hills, Masab Tank, Hyderabad-500028
Contact Person: Shri A S Pardha Saradhi , Company Secretary
Tel: 040-23538757 |Fax: 040-23538759
|Email: [email protected] |Website: www.nmdc.co.in
NMDC Limited Buyback News
News 1 – Buyback PDF [Download]
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