iocl buyback IOCL (INDIAN OIL CORPORATION LTD) on 8-12-18 had informed the exchanges that the meeting of the Board of Directors of the Company is scheduled on 13/12/2018 ,inter alia, to consider and approve the following proposals:(1) Buyback of the fully paid-up equity shares of the Company of face value of Rs.10/- each; (2) Declaration of Interim Dividend on the Equity Shares of the Company for the financial year 2018-19;. IOCL Buyback as approved by its Board of Directors comprises buyback of equity shares of the Company not exceeding 29,76,51,006 (Twenty Nine Crore Seventy Six Lakhs Fifty One thousand and Six only) equity shares  at a price of Rs 149/- ( Rupees One Hundred Forty Nine only) per equity share  IOC Buyback (IOCL Buyback) represents approximately 3.06% of the total paid-up share capital of the Company and is on a proportionate basis under “Tender Offer” route and amounts to Rs. 4435 crore. The Board of Directors of the Company have declared an Interim Dividend of 67.5% i.e. Rs. 6.75 per equity share of face value of Rs. 10/- each for the financial year 2018-19. The dividend will be credited to the account of the shareholders on or before December 31, 2018 and Company has fixed Tuesday, the 25th December 2018 as the record date for the purpose of ascertaining the eligibility of shareholders for payment of Interim Dividend as well as for Buyback of equity shares.

See List of all Forthcoming and Recent Buybacks  See Buyback News
IOCL Buyback Important Updates:
    • IOCL Buyback results in 100% acceptance for Retail
    • IOC Buyback. min.  Acceptance >82% likely based on Bidding
    • IOCL Buyback Live Bid Status
    • IOCL BuyBack Date is 22-01-19 to 04-02-19
    • IOCL Buyback Entitlement Ratio is  37.3%
IOCL Buyback 2018
Particulars
Buyback 2018
Announcement of Intent for Buyback08-12-2018
Market price a day before this130
Board meeting for Buyback13-12-18
Buy Back Type Tender Offer
Buy Back Price149
Dividend Declared in Rs.
Market Price before Board meeting137.5
Market Price a day after Board meeting
% Premium on Market Price8.36%
Buy Back Size in Rs. Crore4435
Buy Back Size ( Shares)297,651,006
Equity Capital in crore9,711.81
Tot Number of shares9,711,809,928
Face Value of Share in Rs.10
Govt Holding in the company 54.06
Individual Holding in the company3.63
% Buyback3.06%
Record Date25-12-18
Market Price as on RD for buyback
Market Price on issue Closing Date
Buy Back Issue date22-01:04-02-19
Buyback Shares reserved for Retail 44,647,651
No. of Retail Shares on RD Buyback119455097
Buyback Entitlement37.38%
Shares Tendered by retail41215921
Tendering ratio34.50%
Retail response92.31%
Actual Retail Aceeptance100%
IOCL Buyback: Estimate of Acceptance Ratio:

This framework is based on estimation of shareholding of IOCL shareholders  who hold around 2000 number of shares. To this we have added estimates for 1) Few additional purchase  of Shares by existing shareholders with eye on earning additional returns through buyback. 2) Purchase of Shares by Arbitrage investors. 3) Trends in recent Buybacks esp. of CPSE's.

Based on approximations indicated above, the entitlement ratio for IOCL is expected to be quite good. Considering an above average tendering ratio, under normal circumstances IOCL could have an acceptance ratio of 70-90% depending on how much new arbitrage investors buy into the stock.  Incase of average interest from investors the possibility of acceptance ration touching 100% cannot be ruled out. 
Estimated Returns for IOCL Buyback ( IOC 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 at this  juncture and there are many political and other uncertainties related to international markets. We have depicted  estimated Absolute Returns in a table form as a function of various possible combinations of Acceptance Ratios and Price Post Buyback.

Shares Purchased
1300
Nos.
Share Buyback Price149
Abs Returns (includes Div)
mp aft bm144
Investment (Rs.)187200
Dividend Income8775
MP aft Buybk
Acceptance %126128130
60%1.77%2.33%2.88%
70%3.37%3.78%4.20%
80%4.97%5.24%5.52%
100%8.16%8.16%8.16%

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 IOCL
          • IOCL  is the largest commercial oil company in the country with  extensive refining, distribution & marketing infrastructure and advanced R&D facilities, 
          • lndianOil's core business has been refining, transportation and marketing of petroleum products. The Company has over the years expanded its operations across the hydrocarbon value chain - upstream into oil & gas exploration & production and downstream into petrochemicals, besides diversifying into natural gas and alternative energy resources . 
          • lndianOil carries its business operations abroad through its overseas establishments in Sri Lanka, Mauritius, the UAE, Singapore and USA. 
        • lndianOil has also been pursuing diverse business interests through joint ventures. During the year, a new joint venture company, viz., Ratnagiri Refinery and Petrochemicals Ltd. (RRPCL), was incorporated with BPCL and HPCL as partners for setting up a mega 60-million metric tonnes per annum (MMTPA) refinery & petrochemicals complex in Ratnagiri district of Maharashtra.
IOCL : Summary of Price Trend and Financials iocl buyback price chart
Snapshot:
Parameter Figures
Market Cap (in ₹ Cr.) 132178
EPS (TTM) 23.87
PE 132178
BV 125.82
PE 5.70
P/B 1.08
EBIT Margin (%) 6.98
PAT Margin (%) 4.13
ROCE (%) 22.33
Debt to Equity (D/E) Ratio 0.53
Dividend Yield: 15.06 %

IOCL Bonus and Dividend History

Announced Bonus RD Ex Date
30-01-2018 1:1 17-03-2018 15-03-2018
29-08-2016 1:1 19-10-2016 18-10-2016
13-09-2009 1:1 30-10-2009 29-10-2009
Dividends:
Date Eff Date Type Div(%) Div(Rs.)
22-05-18 20-08-18 Final 20.00 Rs.2.00
30-01-18 08-02-18 Interim 190.00 Rs.19.0
26-05-17 18-08-17 Final 10.00 Rs.1.0
23-03-17 24-03-17 Interim 45.00 Rs.4.5
31-01-17 09-02-17 Interim 135.00 Rs.13.5
27-05-16 02-09-16 Final 85.00 Rs.8.5000
Assessment: IOCL Buyback
        • IOCL is  likely to benefit from recent softening of crude prices.
        • IOCL's Q2FY19 results were weak due to poor performance of refinery segment and higher forex loss.
        • While IOCL company has delivered a poor growth of -1.05%  in the last five years, its  profit has grown  33.7%  in these years.
        • Stock is providing a good dividend yield of  above 15%.
        • Stock is trading at 1.1 times its book value and PE of less than 6.
        • Bonus of 1:1 may reduce the tendering ratio slightly.
        • Purely based in Market prices and offered Buyback price, IOCL Buyback could be reasonable and even good from an arbitrage angle due to estimates of a fair acceptance ratio and extra income from dividend. CPSEs in the recent past have been going at a good speed with their Buybacks.  Record date of IOC Buyback has already been declared.
        • In past few days after announcement of IOCL Buyback plan, the stock has already moved up 5-6% from the prices prevailing at that time.
        • These are my estimates only and please do your own diligence in this matter as even what may appear as totally safe arbitrage investments in stock markets have inherent risks.
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.