Centre has garnered Rs 747 crore from GAIL India’s share buyback, DIPAM Secretary Tuhin Kanta Pandey said on Friday.
The buyback had opened from February 25 to March 10. The company’s board had approved buyback of 6.97 crore shares at a price of Rs 150 per share.”This represents 1.55 per cent of the total number of equity shares in issued, subscribed and paid-up equity share capital of the company,” GAIL India had said earlier.
The government’s holding continues to stand at 51.76 per cent of GAIL.
“GAIL Buyback of shares fully subscribed. Government received Rs 747 cr out of total buyback size of Rs 1046 cr,” Pandey tweeted.
Under a buyback, a company buys its own outstanding shares to reduce the number of shares available in the open market.
Companies buy back shares for a number of reasons such as to increase the value of remaining shares available by reducing the supply or to return surplus cash to shareholders.
The government wants public sector undertakings to either meet their targets for capital expenditure or “reward the shareholder in the form of a dividend” or share buyback.
A buyback, also known as a share repurchase, is when a company buys its own outstanding shares to reduce the number of shares available in the open market.