Feedback Message Board

I think tendering 50% i.e 10 shares in your case will be ideal as AR is expected to be around 30% and it is surely going to be less than 50% to be on safe side. Also try to wait till last few days of tendering close so that you’ll not miss any chance of increasing probability of seeing share price for more days. I’m no expert so it’s just my analysis

I believe benefit of highe AR will proportional to the share submitted. Submitting 10 will have different AR for the user than submitting 20 for same user. @lokes @ksrk sir and other experts please guide.

@cold…if AR 30%, how many shares will be accepted if tendered 10 and if tendered all 20? I thought it’ll be 3 shares in both cases and so suggested to tender 10

Thanks @sdz and @ColdBurger.

@KAMMA SIVA RAMA KRISHNA, I would love to hear your thoughts as well on this, since you're a pretty much expert in this buyback territory. Please sir enlighten us on this, what should be the best strategy one could follow while tendering the shares.

@sdj I wrote wrong that AR will be different for user. I mean to say if AR is 30% then submitting all 20 will result in 6 accepted and if 10 submitted then 3 will be accepted. It will be not the case that since on record date 20 were held so 6 will be accepted out of 10. Only ER is confirmed AR benefit will be proportional to number of shares submitted.

AR is individual specific and there is nothing like a fixed AR for all investors.

Best AR will be for the investor who is able to estimate how many additional shares (above entitlement) will be accepted and submits the shares accordingly. Any error in estimation will lead to losses. If one estimates AR higher then he will be left with additional shares which will at the mercy of market. If one estimates AR lower then he carries the risk of lesser no of shares accepted in buyback than could have potentially accepted.

It all depends on the ability and skills of the individual for taking the right call. If one believes that TCS shares will give acceptable upside in a reasonable time frame then he should submit all his shares. If one believes that TCS shares will not give acceptable upside in a reasonable time frame then he can submit lesser shares in buyback and sell remaining in the open market............It is an individual decision which can go either way............optimal or sub-optimal

@techuser I too missing the valuable and encouraging posts from @ksrk sir. But he has taken some time off for his personal requirement and we should honor that decision. I just pray the personal time is meant for some positive development or plan🙏

@ColdBurger, Thank you for your valuable insights into how buyback works and how one should take decision while tendering the shares, it really helps. This is the best from your side: "Best AR will be for the investor who is able to estimate how many additional shares (above entitlement) will be accepted and submits the shares accordingly.". For a newbie like me and first time buyback participant, it's going to be a complete Jugad :).

@ColdBurger, yes I agree with you, we should honor his decision, and let him be in his own personal space for the time being.

Accepting ratio will be depending on how many extra shares tendered than ER.

So better to tender 20 shares so maximum of them will be accepted and remaining will be returned if you wish to hold for long term( you can buyback from market for less than 4500 after amount comes into your account as 20% rally within next 15-20 days is not a happening scenario as per my understanding.

with current market price , it make sense to tender all shares rather than tendering part of holding.

Thanks @AvinashUppalapati ji for your views.

Tender all the shares
AR is same for all shareholders(retail)

so tender all the shares so that max no of shares are accepted

if you tender 10, less no of shares will be accepted
that is for sure

@Aashish…Just answer us this question for the sake of entire group pleaseee.

Holding 20 shares on record date and ER is 2 shares. if final AR come to be 30%, how many shares will be accepted if tendered 10 and how many if tendered all 20? I think it’ll be 6 shares in both cases. If AR is 40%, then it’ll be 8 shares in both cases. If AR is 50%, then it’ll be 10 acceptance in both cases.

Please explain in numbers. Thanks in advance

@all,
This is my understanding and observation, may be wrong.

AR is always fixed in % to the shares tendered. In numbers,
If AR is 30% and tendered shares are
1. 10, then => 3 shares
2. 20, then => 6 shares

So in short, always tender max (44-45 in this case) shares.

I Hope, it clears doubts for everyone. Please correct me if I am wrong.
Thanks.

@GJ.. Thanks for the explanation with numbers.
Have a doubt..holding 50 shares and ER is 7 and if AR is 30%, how many shares will be accepted if 10 shares tendered, if 20 & if 50? Will 3, 6 & 15 shares be accepted?

Can AR be less than ER even though tendered more than ER shares. Is ER just a ratio to show what %age of shares they’rebuying? Thanks in advance

@sdj Given you have submitted the number of shares in ER then that is for sure will be accepted. ER cannot be less than AR unless one submitted less than ER quantity.
AR plays role above ER. First all ER shares will be accepted and then the remaining shares will accepted based on AR percentage. I am giving overview and not actual computation.

@sdz


if ER is 2 and AR is 30%
if you tender 10, then 2+(30% of 8)
if you tender 20, then 2+ 30% of 18)

This is rough estimate, exact is a bit different, but i hope you get the idea

For sure, you won't get 6 in both cases

I will repeat again, tender all your shares and max shares will be accepted

do not spare any thought on this

Do like the post if you find it useful

@Aaashish
It should be 5+ in the second case.

@sdz,

If AR is 30%, the simple formula is number of accepted shares => larger number from,
1. 30% of the tendered share
2. ER number (or number of tendered shares if it is less than ER)

1. Tender 10 shares, 7 will be accepted
larger number from 30% of 10 is "3" and "7") =>7

2. 20 => 7 (larger number from 30% of 20 is "6" and "7")
3. 50 => 15 (larger number from 30% of 50 is "15" and "7")
4. Tender 6 shares, 6 will be accepted
larger number from 30% of 6 is "2" and "6") =>6

AR can not be less than ER.
Yes, ER is like a company for sure will take those number of shares from you if you tender.

Bigger example,
Let's say there are 10 shareholders with 20 shares each in their holdings, and ER is 15%. This means the company wants to buy 10*20*0.15=>30 shares in total, 3 from each shareholder.
But 50% of shareholders don't tender their shares in the process. Then the AR will be 30%. Why?
Because now the company has to buy 6 shares from these 5 remaining shareholders to achieve the target of 30 shares in total
30/5 => 6 from each
6 accepted /20 holding per shareholder => 30% AR

So you see, AR is generally more than ER as some shareholders don't tender their shares and keep these for the long term. But while calculating ER, the company is not sure about these kinds of long-term investors and considers them for buyback and overall ER comes down but overall AR is always higher.

I am also new to buyback. Whatever I am saying is from a little bit of study and analysis.

Thanks.

Thanks GJ for thorough explanation of AR calculation so patiently 👍

So ER is the minimum acceptance shares in our pocket if we tender atleast them

@sdz,

Welcome 😀.

Yes, correct.
ER is the minimum acceptance shares in our pocket if we tender atleast those many.

Any idea why Zerodha showing 16th as close date and not 23rd as per TCS’s announcement?

Is close date separate according to investor category? Is that same for all buybacks?

@sdz,

If you read on the top of this page,
https://console.zerodha.com/portfolio/corporate-action-order-window

There is a note specifically for what you asked,
"The TCS buyback orders will be collected between March 8, 2022 and March 23, 2022. While you see the offer end date as March 16, we will reopen the order window on the 16th until March 23."

@sdj: Thanks for reminding 16 is the date shown on Zerodha which is weird given EX Date is 22nd March. Zerodha asks to submit one day before the issue close daya but in this case it 7 days advance.. cannot digest ..must be some reason and need to know that.
@AmitKSingh, @Lokes please enlighten us..

ER+factor less than AR×Additional shares submitted =Accepted shares
If AR is 30% , the factor may be around 20%.Assume total shares 50
If submit 10 shares 7+0.20(10-7)=7.6= 7
If submit 20 shares 7+0.20(20-7)=9.8= 9
If submit 50 shares 7+0.20(50-7) =15.4=15 wil be Accepted

Thanks GJ for clarification and thanks Tomi for more explanation on AR 👍

@Tomi

how to calculate that factor( for AR)
I forgot how

can you explain that once