State-owned Oil India Ltd will buy back 5.04 crore of its shares for a little over Rs 1,085 crore as part of the Government’s push to cash-rich PSUs to part with their surplus either by paying higher dividends or through share buybacks so as to help meet revenue targets.
In a regulatory filing, OIL said its board has approved buyback of shares at an aggregate of no more than 10 per cent of the fully paid-up equity share capital and free reserves of the company.
The board approved “the buyback by the company of its fully paid-up equity shares of Rs 10 each not exceeding 5.05 crore equity shares (representing about 4.45 per cent of the total number of equity shares in the paid-up share capital of the company) at a price of Rs 215 per equity share payable in cash for an aggregate consideration not exceeding Rs 1085.72 crore,” it said.
The nation’s second large oil explorer had a little less than Rs 20,000 crore of reserves.
OIL shares closed at Rs 218.78 on the BSE on Thursday. Friday was a trading holiday on account of Gurunanak Jayanti.
The Government is targeting a minimum Rs 5,000 crore through share buyback offers of state-owned firms like Coal India and BHEL.
Besides OIL, at least half a dozen other central 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 Rs 3,000 crore.
OIL said the Government holds 66.13 per cent stake in the company and has offered to tender 5.04 crore shares in the buyback offer.