New Delhi, Jan 28 (PTI) State-owned NALCO will buy back Rs 749 crore worth of shares, DIPAM Secretary Tuhin Kanta Pandey said on Thursday.
The government currently holds 51.50 per cent stake in the company and would tender shares proportionate to its holding.
'NALCO has made an offer for buyback of its equity shares for an amount up to Rs 749 crore. As the promoter, GoI has decided to participate in the buyback to the extent that GoI equity remains at least 51 per cent,' Pandey tweeted.
So far in current fiscal, four state-run companies -- RITES, NTPC, KIOCL, NMDC -- have completed share buyback which fetched Rs 2,769 crore to the exchequer.
A buyback, also known as a share repurchase, is when a company buys its own outstanding shares to reduce the number of shares available in the open market.
Companies buy back shares for a number of reasons, such as to increase the value of remaining shares available by reducing the supply or to return surplus cash to shareholders.
The government wants public sector undertakings to either meet their targets for capital expenditure or 'reward the shareholder in the form of a dividend' or share buyback.
Finance Minister Nirmala Sitharaman had in the Budget 2020-21 set a target of raising Rs 2.1 lakh crore from privatisations and sale of minority stakes in state-owned companies. So far in this fiscal, the government has garnered Rs 17,957 crore from CPSE minority share sale and buyback. PTI JD HRS hrs