NTPC – Buyback Case Study

Part 3- NTPC Buyback

Let us assume the date today is 29th December,2020

Post Buyback Status

Source: in.tradingview.com

Luckily, on 29th December,2020 the price was trading in the range of 98-99 instead of range 80-85 as per our initial assumption (Part 1), the unaccepted shares could be sold at price 98-99 and while the accepted ones fetched 115/- per share.

Source: Bse announcements

Actual Payoff

Small Category Results:Under Small shareholder, the actual acceptance ratio came at 43 instead of 16 (Please refer to part 1- click 1 on bottom of page) It means only 37% shares were tendered. The return under this category was approx 23% (pre tax) in 2 months.

General Category Results: Under General Category, the actual acceptance ratio came at 18 instead of 2. It means only 10 percent tendered their shares in this category. The return under this category was approx 18% (pre tax) in 2 months.

The results under General category were way beyond our expectations, considering the initial assumptions made in Part 1 (Please visit part 1 by clicking on 1 at the bottom of page). Our estimates regarding the upside of general category were too pessimistic. As this case seems to be different, particularly in respect of huge institutional holding.

You may have a different opinion and we would love to know.

May we all Learn Together

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