The board of state gas utility GAIL India Ltd on Thursday said it intends to buyback ₹1,082.72 crore worth of shares of the company under a share buyback plan.
In a stock exchange filing, the nation’s top gas transporter and distributor said it plans to buyback shares, not exceeding 5,69,85,463 fully paid up equity shares of face value of ₹10 each at a price of ₹190.
Shares of GAIL were trading 1.53% per cent higher at ₹155.80. The buyback price is at a 24% premium over Wednesday’s closing price of ₹153.40.
Buying back shares is considered a tax-efficient way of rewarding shareholders. The government owns a 51.80 per cent stake in the company and is likely to participate in the buyback.
GAIL had done a share buyback in 2020-21. The government had received ₹747 crore from that share buyback.
The share buyback, or share repurchase, is when a company buys back its own shares from investors or stakeholders. It can be seen as an alternative, tax-efficient way to return money to shareholders.
Buybacks are attractive in tax terms even after considering the 10 per cent tax on long term capital gains (LTCG).
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