New Delhi: The board of Oil and Natural Gas Corp. Ltd has approved a share buyback worth 4,022 crore, ONGC said in a regulatory filing Thursday. The share buyback entails repurchase of 25.29 crore scrips, or 1.97% of all equity, at 159 apiece. The government has been pushing cash-rich public sector undertakings (PSUs) to use their funds to buyback shares or pay a higher dividend, to achieve its fiscal deficit target of 3.3% for 2018-19.

Share buybacks refer to the repurchasing of shares by the company that issued them. A buyback occurs when the issuing company pays shareholders the market value per share and re-absorbs that portion of its ownership that was previously distributed among public and private investors.

Last week, Indian Oil Corp. Ltd (IOC) said it will buy back 29.76 crore shares for about 4,435 crore and spend another 6,556 crore on paying an interim dividend to shareholders. The government aims to raise at least 5,000 crore through share buyback offers of state-owned firms like Coal India Ltd, BHEL and Oil India Ltd.

Besides Indian Oil, at least half a dozen other PSUs have disclosed share buyback programmes. Prominent among these include NHPC, BHEL, NALCO, NLC, Cochin Shipyard and KIOCL that could fetch the government a little over 3,000 crore. The government is expected to participate in each of the share buyback programme of these PSUs.

Last month, Oil India Ltd announced a buyback of 5.04 crore of its share for a little over 1,085 crore.

The Department of Investment and Public Asset Management (DIPAM), which has been set a target to raise 80,000 crore for the government through stake sale in PSUs, had prodded all cash-rich PSUs to go for share buybacks. PSUs having a net worth of at least 2,000 crore and a cash balance of more than 1,000 crore have to mandatorily go in for share buyback.

Of the 80,000 crore government disinvestment target, the government has so far raised just over 15,000 crore through minority stake sale in PSUs.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed

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