Rs 1046 crore share buyback & 25% interim dividend, GAIL declares

GAIL, the largest gas distribution company in the country, said its board approved the buyback of 6.97 crore shares at a price of Rs 150 per share. A Rs 1,046.35 crore share buyback program was revealed on Friday, as it aimed to refund surplus cash to shareholders, the largest being the Indian government. The approval for buyback of equity shares as come along with the declaration of an interim dividend for the ongoing fiscal at its board meeting.

The repurchase of 6.97 crore equity shares, represent 2.5% of the total paid-up equity share capital carrying a face value of Rs 10 each, also interim dividend declared is 25% (Rs 2.50 per share) for the financial year 2020-21.

After the announcement, GAIL’s shares dropped as much as 5.2 per cent to Rs 136.55 but recovered from the day’s low. 35 of the 39 analysts monitoring the business have a ‘buy’ rating and four show a ‘hold.’ The shares were trading 6% higher than its Bloomberg consensus 12-month price target of Rs 135.6.

According to the company’s latest shareholding, while foreign investors owned 15.74% stake in the company, the government held a 51.76% stake and has asked at least eight state-run companies including miner Coal India, power utility NTPC, and minerals producer NMDC as it scours for the ways to generate funds to rein in their fiscal deficit.