GAIL’s Board of Directors approve share buyback worth Rs 1,046.35 crore, interim dividend

• The shares represent 1.55 percent of the total number of fully paid-up equity shares in the paid-up share capital of GAIL

• The Board of Directors of GAIL has also approved payment of Interim Dividend for FY 2020-21 @ 25%

New Delhi: The Board of Directors of GAIL (India) Limited has given a nod to the company's share buyback plan worth Rs 1,046.35 crore, the PSU said on Friday. In a regulatory filing to the stock exchanges, the company said that the Board of Directors of the company has approved the buyback of 6,97,56,641 fully paid-up equity shares of face value of Rs 10 each in a meeting held on Friday. The shares represent 1.55 percent of the total number of fully paid-up equity shares in the paid-up share capital of GAIL. 

And the buyback offer price has been fixed at Rs 150 per equity share payable in cash for an aggregate consideration not exceeding Rs 1,046.35 crore, representing 2.50 percent and 2.26  percent of the aggregate of the fully paid-up equity share capital and free reserves as per the audited standalone and consolidated financial statements of GAIL, the PSU said.

GAIL Board also approves interim dividend at 25%

The document also said that the Board of Directors of GAIL "has approved payment of Interim Dividend for the FY 2020-21 @ 25% (Rs 2.50 per equity share) on the paid-up equity share capital of the Company." For both dividend payout and share buyback, the record date has been fixed at January 28. 

ALSO READ: GAIL CMD: Our cash position is good, in a position to undertake share buyback

After opening at Rs 144.75 apiece on Friday, GAIL shares touched a low of Rs 138.65 around 3 pm. On the previous day, buoyed by the news of share buyback, the stock had closed at Rs 144 apiece. 

The backdrop

The government is believed to have reached out to Coal India Ltd (CIL), MOIL and a bunch of other PSUs for share buybacks this fiscal year. NTPC, NMDC Ltd, Engineers India Ltd (EIL), KIOCL have already announced a share buyback. The government is the largest shareholder in all these companies and is looking to sell off its equity for cash in return. The Department of Investment and Public Asset Management (DIPAM) has managed to raise just Rs 13,844.49 crore out of its FY21 target of Rs 2.1 lakh crore so far and is therefore, looking to raise as much as it can before the end of the financial year. DIPAM Secretary Tuhin Kanta Pandey had said in an interview that the Centre is encouraging PSUs to announce share buybacks if they have extra cash available after meeting their capex requirements.

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