GAIL announces ₹1,046-cr share buyback, announces interim dividend1 min read . Updated: 15 Jan 2021, 06:29 PM IST
The record date for dividend as well as for the purpose of share buyback has been fixed at 28 Jan, 2021
Public sector utility GAIL today announced share buyback of 6,97,56,641 equity shares of face value of Rs. 0 each (representing 1.55 % of the total number of fully paid-up equity shares in the paid-up share capital of the company) at a price of ₹150 for an aggregate consideration of ₹1,046.35 crore.
GAIL board also approved payment of interim dividend for the FY 2020-21 at ₹2.50 per equity share on the paid-up equity share capital of the company.
The record date for dividend as well as for the purpose of share buyback has been fixed at 28 January, 2021.
On Friday, GAIL's scrip on NSE closed 3.3% lower at ₹139.20.
GAIL (India) is the nation's largest gas distribution firm.
The government owns 51.76 per cent of GAIL and is expected to participate in the share buyback.
It stands to get ₹583.6 crore from the dividend payout and another ₹541.5 crore if it participates in the buyback by tendering a proportionate number of shares.
The buyback plan of ₹1,046.35 crore represents "2.5 per cent and 2.26 per cent of the aggregate of the fully paid-up equity share capital and free reserves of the company," GAIL said in the filing.
The plan was within the statutory limits of 10 per cent, it said.
The government has asked at least eight state-owned 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.
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.
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.