FinMin asks PSUs to consider share buybacks

Even as the Prime Minister’s Office has reviewed investment plans of public sector firms,the finance ministry has once again prodded them to go for buyback of shares.

Written by Surabhi | New Delhi | Published:May 21, 2013 2:35 am

Even as the Prime Minister’s Office has reviewed investment plans of public sector firms,the finance ministry has once again prodded them to go for buyback of shares.

“Line ministries have been asked to sensitise PSUs under their supervision to newly announced measures such as buy back of shares,” said an official close to the development,adding that the issue was discussed recently at an inter-ministerial meeting.

With an ambitious Rs 40,000-crore target from stake sale proceeds in 2013-14,the department of disinvestment has been keen to nudge cash-rich PSUs into using their investible surplus for buying back their shares.

The department has also mooted the proposal to Coal India Ltd and NHPC to use buyback of shares for their proposed stake sales this fiscal,though a final decision is awaited.

The government had,in March 2012,cleared the strategy proposed by the finance ministry to would allow PSUs to buyback shares from the government. Though eight cash-rich PSUs including ONGC Ltd and Coal India Ltd were identified,none have so far come forward with concrete plans.

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