Engineers India Limited Buyback: Snapshot

TypeTender
BuyBack Size- Shares69,869,047
Buy Back Price84
BuyBack Size- Rs. Cr586.90
% Buyback /equity11.06%
Board meet12-11-20
MP befo BM70.2
% Premium on MP19.66%
Record DateAfter Postal Ballot
Engineers India Buyback: Updates
  • RD after Postal Ballot

See List of all Forthcoming and Recent Buybacks

Engineers India Buyback 2020 and 2017 : Info
Buyback '20
Buyback '17
TypeTenderTender
BuyBack Size- Shares69,869,04741,961,780
Buy Back Price84157
BuyBack Size- Rs. Cr586.90658.80
% Buyback /equity11.06%6.23%
Board meet12-11-2020-03-17
MP befo BM70.2
% Premium on MP19.66%5.94%
Record Date After Postal Ballot29-06-17
Shares reserved- Retail 10,480,3576,294,267
Announcement 09-11-2014-03-17
MP befo announcement67148.2
MP aft announcement70.7
Tot No.of shares 631,911,420673,873,200.00
FV of Share in Rs.55
Equity Capital- cr315.96336.94
Buy Back Issue date25-07:07-08-17
Shares on RD 36811398
Buyback Entitlement17.10%
Shares Tendered 10473
Tendering ratio0.03%
Retail response0.17%
Aceeptance %100%
Engineers India Buyback: Broad Estimates

This framework to estimate the % acceptance of shares tendered in the buyback is broadly based on
1) Estimate of number of existing investors with value of holding <= 2 Lacs
2)Purchase of few additional Shares by existing shareholders with eye on earning additional returns through buyback.
3) Purchase of  few shares by arbitrage investors.
4) Data from earlier Buyback where available

Based on above, the estimates for the Buyback are:
Entitlement ratio : around 15-20%
Acceptance ratio: around 25-35%

Cross Tabulation of Estimated Returns: Engineers India Limited Buyback

The absolute returns/Loss that may accrue to an Investors/Arbitrage trader are a function of Percentage Acceptance Ratio and Price Post Buyback.  Investors may kept in mind that stock markets are quite volatile ans stock price are affected bya platehora of factors including financial results, changes in internal and external business environment, market sentiment and more so after end of buyback. We have depicted  estimated Absolute Returns in table form as a function of various possible combinations of Acceptance Ratios and Price Post Buyback.

Shares Bought
2000
Nos.
Buyback Price84
Price (Live)74.8
Investment (Rs.)149600
Absolute Returns %
MP Aft Buybk
Acceptance %646668
25%-7.75%-5.75%-3.74%
30%-6.42%-4.55%-2.67%
35%-5.08%-3.34%-1.60%
40%-3.74%-2.14%-0.53%

This post is purely for informative and educational purpose and is in no way suggestive of taking any position in the counter. Profit or Loss in  any buy sell operation in stocks is associated with significant risk of capital loss. For more on Buyback Benefits and other issues please refer the earlier Posts
 Buyback of Shares: A Primer for Retail Investors

About Engineers India Limited :
  • Engineers India is a CPSE incorporated in 1965.
  • Engineers India Ltd is an engineering consultancy company providing design, engineering, procurement, construction and integrated project management service with focused on oil and gas, petrochemicals industries in India as well as abroad.
  • EIL also operates in her sectors like non-ferrous mining, infrastructure, Power etc.
  • On international markets front- the company has offshore projects in UAE, Oman, Qatar and Bahrain.
  • Execution of its key projects Dangote refinery projects and Mangolia refinery projects worth Rs5.15bn are on track

Engineers India Buyback: Stock Price Trend

Assessment: Engineers India Limited Buyback

  • Engineers India Limited is one of India’s leading Engineering Consultancy and EPC companies in Hydrocarbons and Petrochemicals with focused diversification into other sectors.
  • Engineers India Limited is almost debt free.
  • Engineers India Limited is providing a dividend yield of ~ 7.2%.
  • EIL dividend payout stands at healthy ~70%
  • Q2FY21 Results: Stable yoy, better tahn Q1FY21. Q1qFY21 was affected by COVID 19 issues.
  • Attractiveness from Arbitrage Angle: Mild to Moderate. I may add the stock on dips.
  • Time Frame – about 3-3.5 month

Standard disclaimer:  I am not a SEBI registered analyst. I may have vested interest in every stock I discuss. Please do your own due diligence as stock market investments have high degree of inherent risk. Further the data in the post is prone to errors.