New Delhi: The government expects to garner close to Rs 5,000 crore through share buybacks by public sector companies, including that of Coal India, by end of January, a senior finance ministry official said. “The share buyback plans of PSUs are in various stages of approvals. So by the end of January we are expecting these companies to buy back shares worth Rs 5,000 crore from the government,” the official said.
Other firms, supposed to undertake share buybacks, include National Aluminium Co, NLC India, Cochin Shipyard, Bharat Heavy Electricals, KIOCL, and NBCC. On Wednesday, NHPC said its board has approved buying back Rs 21.43 crore shares at Rs 28 apiece, for an amount of Rs 600 crore. National Aluminium, NLC, Cochin Shipyard, Bharat Heavy Electricals and KIOCL have already announced buyback plans.
As per the shareholding pattern in these companies, the government is likely to get about Rs 2,700 crore from these five companies. Another Rs 1,000 crore is likely to come from the buyback by Coal India, the official said. Some public sector companies are in the process of getting board approvals and completing other regulatory processes before going ahead with their respective share buyback plans, the official said.
State-owned NBCC India is also exploring the possibility of a share buyback, Chairman and Managing Director AK Mittal had said on Thursday. The government has short-listed 10-12 public sector companies for exploring the possibility of share buyback in the current financial year ending March.
The public sector companies will be asked to follow capital restructuring guidelines set out by the disinvestment department in May 2016. According to Department of Investment and Public Asset Management guidelines, public sector companies with net worth of over Rs 2,000 crore or cash holding of above Rs 1,000 crore should mull buying back their shares.
The government, which aims to collect Rs 80,000 crore from divestment in the current financial year ending March, has so far managed to raise Rs 15,247 crore, including Rs 5,218 crore through the offer-for-sale in Coal India Ltd. The government had raised a record Rs 1 lakh crore from divestment in 2017-18. End