State-owned GAIL approved the buyback of the fully paid-up shares on Thursday. The company said it plans to repurchase Rs 1,082.72 crore of shares of the company under a share buyback plan. GAIL will repurchase shares not exceeding 5,69,85,463 of par value of Rs 10 each at a price of Rs 190. Shares of GAIL traded 0.59 percent higher at Rs 154.30. The repurchase price carries a 24 percent premium over Wednesday’s closing price of Rs 153.40. GAIL’s share buyback price is 24 percent premium to previous day’s closing price at NSE
The company has set Friday, April 22, 2022 as the record date to determine whether shareholders are eligible for share repurchases. The buyback will be offered on a pro rata basis through a tender process in accordance with Sebi regulations, 2018. Shares of the government-owned natural gas company traded more than 1 percent higher at Rs 155.05 at 12:28 PM. .
GAIL Share Repurchase Details
The size of the company’s tender offer represents 2.50 percent of its total fully paid-up share capital and 2.22 percent of its free reserves according to the company’s audited standalone and consolidated financial statements for fiscal year 21.
It will be offered on a pro rata basis through a tender process in accordance with the Sebi regulations, 2018.
GAIL Shareholder Pattern
According to the company’s stock pattern prior to the buyback on Friday, March 25, 2022, the government held a 51.45 percent stake in GAIL, FPI’s 19.37 percent and mutual funds 9.09 percent.
What is share buyback?
A tax-advantaged way to reward shareholders, in the context of its share repurchase or repurchase offer, a company buys back its own shares from investors or stakeholders.
Previous buybacks by GAIL
GAIL had made a share buyback in 2020-21 from which the government received Rs 747 crore. The company repurchased more than 6.97 crore shares or 1.55 percent of its total paid-up equity. The price was then set at Rs 150 per share.
Started in 1984 as a natural gas transmission company with a single cross-border trunkline, GAIL has now become the flagship natural gas company of India.
It is the largest integrated natural gas marketing and transmission company with a presence across the entire natural gas value chain, including gas transmission and marketing, LPG transmission, gas processing, petrochemicals, LNG imports, exploration and production, and city gas distribution (CGD).
GAIL owns and operates approximately 13,840 km of natural gas pipeline network, which is 74 percent of the total length of the transnational natural gas pipeline network in 28 states and Union Territories.
GAIL is the leading gas marketing company in India, accounting for approximately 52 percent of the natural gas and 44 percent of the LNG sold in India.
The company supplies 67 percent of the gas consumed in the fertilizer sector, 53 percent for power and 60 percent for CGD in India. Its LNG portfolio is over 14 MTPA (million tons per year).
The PSU has also embarked on alternative energies such as green hydrogen, renewables and biofuels, which are of national importance and are likely to provide a transition into the future.
Read all the latest news, breaking news and IPL 2022 Live Updates here.