The government has received Rs 747 crore from share buyback by oil GAIL, DIPAM Secretary Tuhin Kanta Pandey said on Friday. “GAIL Buyback of shares fully subscribed. The government received Rs 747 cr out of total buyback size of Rs 1046 cr,” Pandey tweeted.
Government holding in the company stands at 51.45 per cent. 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.