The country’s largest gas distribution company GAIL (India) has announced that it will consider buyback of shares in its upcoming board meeting on Friday, January 15.
In a filing to the stock exchanges, the company said that its board will meet on January 15 to consider share buyback and payment of interim dividend for the financial year ending March 2021.
The board will consider the proposal of buyback of the fully paid-up equity shares of the company of face value of Rs 10 each, the exchange filing informed. It did not provide any other details.
Following the announcement, the shares of GAIL (India) rose 5.75 per cent to Rs 143.50 apiece on the BSE and National Stock Exchange (NSE) during the intraday trade today.
A share buyback or share repurchase means that a company buys its own shares from its shareholders to reduce the number of shares available in the stock market. A company can buy back its shares for various reasons, such as to increase the value of remaining shares available by reducing the supply or to return surplus cash to shareholders.
The government has asked at least eight state-run companies to consider share buybacks as it scours for ways of raising funds to rein in its fiscal deficit. The firms asked to consider share buybacks include miner Coal India, power utility NTPC, and minerals producer NMDC. It wants public sector undertakings (PSUs) to either meet their targets for capital expenditure or “reward the shareholder in the form of a dividend” or share buyback.
The government holds 52.1 per cent of GAIL (India) and is likely to participate in the GAIL buyback just as it did in the case of NTPC, Engineers India Ltd, RITES and KIOCL.
–with inputs from PTI
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines