GAIL board okays share buyback plan of Rs 1,046 crore

New Delhi: State-run gas utility GAIL will spend up to Rs 1,046 crore to buy back 1.55% of its total shares, the company said in a public filing.

The board green-lighted the buyback plan on Friday. The company would repurchase 6.97 crore shares at a rate of Rs 150 per equity share, an 8% premium to Friday’s price of Rs 139.

GAIL’s share price has risen 21% in the last four weeks of trading.

The company would accept shares from all equity shareholders of the company on a proportionate basis through a tender offer route.
The buyback is expected to give the government a chance at offloading its shares in the company and raise funds in year public finance is under stress.

The government holds 51.7% stake in GAIL and it can offer a proportionate number of shares to the company under the buyback programme. But if other shareholders were to offer fewer shares, the government can return more shares. In either case, the government will continue to hold a majority stake in the company after the buyback.

GAIL, the nation's largest gas transporter and marketer, has also announced an interim dividend of Rs 2.5 per equity share. January 28 is the record date for dividends as well as the buyback programme.