GAIL will buy back Rs 1,100 crore stock at 24% premium
NEW DELHI: State-run gas utility GAIL Ltd on Thursday announced a Rs 1,083- crore share buyback plan for 5.7 crore scrips at Rs 190 each, marking a premium of roughly 24% on Wednesday closing price on the NSE. This is the second buyback in as many years and will benefit the government as it holds 51.8% in India’s largest gas company.
The government had in 2020-21 gained Rs 747 crore in a Rs 1,046 crore buyback announced by GAIL. The total number of shares represents 2.5% of the company’s paid-up capital and free reserves as on March 31, 2021, GAIL said. A buoyant bottom line is the driving force behind the share buyback, considered a tax-efficient way of rewarding shareholders. Buybacks are attractive in tax terms even after considering the 10% tax on long term capital gains.
