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Amateur Investor's Comments

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1. Amateur Investor

| Link|February 16, 2022 7:42:28 PMReply

Dear aniket sir, ksrk sir, lokes sir,

I'm participating in buyback first time. So wanted to know if I have let's say 20 shares in my account as of record date, and I tender 10 of them. If AR is 50%, then will 10 shares be accepted or 5?

If I tender all 20 shares, when will I be able to sell my shares?

I know holding TCS will make sense as risk is minimum but I don't want to breach the per share max allocation I'm following. Thank you.

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1.1. KAMMA SIVA RAMA KRISHNA

| Link|February 17, 2022 6:24:57 AM

Amateur Investor ji,
10 shares will be accepted as AR depends upon the number of shares held on the Record Date, not the number of shares submitted for the Buyback.
You will be able to sell the unaccepted shares after they are credited back to your Dmat account on completion of the process of the buyback (on the day of or the next day of the credit of the resultant amount of the buyback to your bank account). All the best.

1.2. VKReddy

| Link|February 18, 2022 6:56:20 AM

Hi KSRK sir, On positive note for me it looks your calculation is wrong. I held 500 shares of MOIL on record date, sold 200 shares last week and tendered 300 shares for buy back (with assumption of 60% AR). But received message saying 213 shares accepted out of 300 tendered. Wondering how this can be possible. This is just to educate others. Never mind it, I know you are already sharing very good info in the forum.

1.3. KAMMA SIVA RAMA KRISHNA

| Link|February 18, 2022 7:49:34 AM

Sir,
I may not be that much expert as I am still in the process of learning only. But, still I believe that there is something wrong. I sincerely request you to kindly verify the offer letter sent to your mail by the Registrar wherein the number of shares held on the Record Date and the number of shares acceptable out of them, will be intimidated. If you confirm, what you mentioned here, from the mail, it is something extraordinary. Other knowledgeable members may please enlighten.

1.4. VKReddy

| Link|February 18, 2022 8:49:03 AM

Sir,

Thanks for your reply. I checked offer mail again. It clearly says "No of Shares held on Record date 31,Dec,2021 are 500", and "Entitlement for Buyback offer are 98 shares".
So, with the 60% AR assumption I tendered only 300 shares, and sold remaining 200 shares last week.
213 out of 300 accepted. means 71% AR for me, it is neither 65% of 500, nor 65% of 300. I guess there is some other clause which we are missing here.

Can any experts please enlighten me. Also useful for other members in the forum.

1.5. KAMMA SIVA RAMA KRISHNA

| Link|February 18, 2022 12:07:59 PM

First, your entitled shares (98) will be accepted. Then, proportionate acceptance on the number of balance of shares i.e.,300-98=202 will be made. That’s what I know. Experts n knowledgeable members in this regard may enlighten for the benefit of all the readers in the academic interest. Thank you.

1.6. KAMMA SIVA RAMA KRISHNA

| Link|February 18, 2022 12:13:38 PM

To be more clear, after allowing the entitled shares to all, the balance of left over shares will be proportionately allotted on the basis of the number of shares submitted for the buyback. Thank you.

1.7. TOMI

| Link|February 18, 2022 12:35:00 PM

1. Acceptance Qty = Entitlement Qty + Additional Qty.
2. Additional Qty=Additional Ratio × Qty submitted in addition to entitlement
3. I have worked out the Addl Ratio as 0.56
4. Now you can workout your Acceptance Qty
5 Assume total Qty 500 shares and submitted 300
6.Accepted Qty= 100(ER20%)+0.56×200(300_100)
7Acc Qty=100+112=212
8. Assumed values are approximate. This is applicable to fully submitted shares also..Please check.

1.8. KAMMA SIVA RAMA KRISHNA

| Link|February 18, 2022 2:00:36 PM

With excuses sought from TOMI JI, the calculation should be as under:
1. Additional Qty=Additional Ratio × Qty submitted in addition to entitlement
i.e., 202 x 0.57= 115.14 rounded to 115
2. Acceptance Qty = Entitlement Qty + Additional Qty. i.e., 98+ 115 = 213
Hope that it is clear than all the above.

1.9. VKReddy

| Link|February 18, 2022 2:24:16 PM

Thank you TOMI Ji, and KSRK sir for spending your valuable time to answer my query for the benefit of all the readers in the forum. It's clear now.

1.10. Ou Ai

| Link|February 18, 2022 6:29:14 PM

@vkreddy
KSRK computation of 98+0.57×202=213 is absolutely right. However your AR of 71% on 300 higher than 65% had you submitted all 500 though mathematically right, beneficially incorrect. For example if you had tendered only 98 shares all would have got accepted and AR would have appeared 100%. But benefits were on just 98 shares. So if you had tendered all 500 though AR @65% would have benefited with 300 shares higher than 213.
Thus AR is sum of ER plus additional acceptance say (ar). As AR merges with ER it's 100% and moves farther of ER higher benefits with on larger number of shares.

1.11. Aaashish

| Link|February 18, 2022 7:07:44 PM

@VKreddy ji

you bought 500
entitlement : 98
AR : 65%
tendered shares : 300

shares to be accepted : 98(Entitlement) + (65% of (300-98 = 202) = 131)
so shares that should have been accepted = 98 + 131 = 229

@KSRK ji

How is the ratio .57, shouldn't it be .65( AR was 65% I Believe)

1.12. KAMMA SIVA RAMA KRISHNA

| Link|February 18, 2022 8:42:17 PM

Ou Ai ji,
You may be aware that I have been advising the readers from time to time to submit all the shares held on the Record Date for the Buyback to get the optimal benefit. But, still ? I used to feel very sorry for that as they are not getting the maximum benefit. What to do?

1.13. KAMMA SIVA RAMA KRISHNA

| Link|February 18, 2022 8:52:07 PM

Aaashish ji,
If you please study various topics on the Buybacks, you will be knowing why it was not 0.65 but 0.57. Sorry for disappointing you.

1.14. Aaashish

| Link|February 18, 2022 10:12:21 PM

@KSRK ji

Thanks for the response.
could you share some link which has this info and has explained this in detail.

I will go through that and will enhance my knowledge on this topic

1.15. KAMMA SIVA RAMA KRISHNA

| Link|February 19, 2022 7:53:12 AM

I don’t have that technical knowledge please. Sorry.

1.16. VKReddy

| Link|February 19, 2022 11:04:55 AM

Hi Everyone, I was in an impression that AR applies to the shares held on record date. Seems some other clause also there as KSRK and other experts explained. Purposefully I sold 200 for some other commitments. No regrets anyways. Just wanted to understand how buyback worked for me. Still learning :-). Thanks all for clarifying.

1.17. TOMI

| Link|February 19, 2022 12:35:12 PM

Assume 1000 shares submitted in full
Additional Qty received =Accepted Qty - entitlement =653-196=457
Additional Ratio =Additional qty received ÷ Additional Qty submitted =457÷(1000-196)=56.84 ie 57

1.18. Ou Ai

| Link|February 19, 2022 1:56:19 PM

@vkreddy
for your and all others benefit ,

ER is based on number of shares held as on record date.
Additional acceptance has no relation to number of shares on record date. Solely based on extra shares tendered over and above entitled quantity. Total tendered can not be more than number of shares on record date.

As @KSRK is advocating tender all the shares on record date unless the market price moves up over buyback price to sell in market.

This will offer maximum benefits. I too learnt hard way last year post part tendering in NIIT buy back!

1.19. lokes

| Link|February 20, 2022 12:22:06 AM

I already knew that initial reply from KSRK sir to @amateur investor was not complete correct but since i was busy so couldnt respond else i thought to reply with proper example for this whenever i get time.
And now its good to see that @tomi has clarified and now things are clear to @ksrk sir and everyone so since this question keeps coming in buybacks so above calculation can be copy pasted to someone in future.
Final AR is applicable on all quantities held on record date and tendered. So it will be same for everyone only when they are tendering all their shares, unlike ER , which is same for everyone. But obviously more the shares you will tender, more will be accepted.

Additional Ratio (will be known once AR comes out) can be calculated from someone who has tendered all shares held on record date = (Accepted shares - Entitled shares) / (total shares - Entitled shares)
1. Additional Shares=Additional Ratio × Shares submitted in addition to entitlement
2. Accepted shares = Entitlement shares + Additional shares