ONGC Board To Consider Share Buyback On Dec. 20
State-owned Oil and Natural Gas Corporation Ltd. on Friday said its board will consider buyback of company shares at a meeting on Dec. 20.
This follows government pushing cash-rich public sector units to use their funds to buyback shares or pay a higher dividend. The government is looking to bridge their fiscal deficit through higher receipts of dividend as well as selling its shares in PSUs in the buyback programmes.
“The meeting of Board of Directors of the company will be held on Thursday, Dec. 20, 2018, inter-alia, to consider the proposal for buyback of the fully paid-up equity shares of the company,” ONGC said in an exchange filings. The government holds 67.48 percent stake in India’s largest oil and gas producer.
Just on Thursday, state-owned Indian Oil Corporation said it will buyback 29.76 crore shares for about Rs 4,435 crore and spend another Rs 6,556 crore on paying an interim dividend to shareholders. The government, which holds a 54.06 percent stake in the company, is expected to participate in the share buyback.
The government is targeting a minimum Rs 5,000 crore through share buyback offers of state-owned firms like Coal India, BHEL and Oil India Ltd. Besides IOC, at least half a dozen other central PSUs have disclosed share buyback programmes. Prominent among these include NHPC, BHEL, NALCO, NLC, Cochin Shipyard and Kudremukh Iron Ore Company that could fetch the government a little over Rs 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 Rs 1,085 crore.
The Department of Investment and Public Asset Management, which has been set a target to raise Rs 80,000 crore for the government through stake sale in central public sector enterprises, had prodded all cash-rich PSUs to go for share buybacks. State-run firms having a net worth of at least Rs 2,000 crore and a cash balance of more than Rs 1,000 crore have to mandatorily go in for share buyback.
Of the Rs 80,000 crore disinvestment target, the government has so far raised just over Rs 15,000 crore through minority stake sale in PSUs.