Profit before Tax (PBT) for H1 FY24 stood at Rs 5,019 crore as compared to Rs 5,770 crore for the corresponding period in the previous year.
Public sector utility, GAIL (India) on Friday announced a share buyback programme of Rs 1,046.35 crore as it looked to return surplus cash to shareholders, the biggest being the government of India.
The board has approved the buyback of 6.97 crore shares at a price of Rs 150 per share, the company said in a regulatory filing.
The shares (6,97,56,641 of face value of Rs. 0 each) being bought represent 1.55 per cent of the total number of fully paid-up equity shares.
GAIL also approved an interim dividend of 25 per cent (Rs 2.50 per share) for financial year 2020-21.
The buyback plan of Rs 1,046.35 crore represents “2.5 per cent and 2.26 per cent of the aggregate of the fully paid-up equity share capital and free reserves of the company,” GAIL said in the filing.
The plan was within the statutory limits of 10 per cent, it said.
The record date for buyback of equity shares as well as payment of the interim dividend will be January 28, GAIL said.
The government has asked at least eight state-run companies to consider share buybacks as it scours for ways of raising funds to rein in its fiscal deficit.
The firms asked to consider share buybacks include miner Coal India, power utility NTPC, and minerals producer NMDC.
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.
The government, which holds 51.76 per cent of GAIL, is likely to participate in the GAIL buyback just as it did in the case of NTPC, Engineers India Ltd, RITES and KIOCL.
It stands to get Rs 583.6 crore from the dividend payout and another Rs 541.5 crore if it participates in the buyback by tendering a proportionate number of shares.