ONGC board to consider share buyback on Dec 20

State-owned Oil and Natural Gas Corp (ONGC) Friday said its board will consider buyback of company shares at a meeting on December 20.

This follows Government pushing cash-rich PSUs to use their funds to buy back shares or pay a higher dividend. The Government is looking to bridge budgetary deficit through higher receipts of dividend as well as selling its shares in PSUs in the buyback programmes.

Stock buybacks refer to the repurchasing of shares by the company that issued them. A buyback occurs when the issuing company pays shareholders the market value per share and re-absorbs that portion of its ownership that was previously distributed among public and private investors.

In a regulatory filing, ONGC said, “The meeting of Board of Directors of the company will be held on Thursday, December 20, 2018, inter-alia, to consider the proposal for buy-back of the fully paid-up equity shares of the company.”

The Government holds 67.48 per cent stake in India’s largest oil and gas producer ONGC.

Just on Thursday, state-owned Indian Oil Corp (IOC) said it will buy back 29.76 crore shares for about Rs 4,435 crore and spend another Rs 6,556 crore on paying an interim dividend to shareholders.

The board of the country’s largest oil firm Thursday approved buyback of up to 29.76 crore equity shares, or 3.06 per cent, at Rs 149 per share.

The Government, which holds a 54.06 per cent stake in the company, is expected to participate in the share buyback.

The Government is targeting a minimum Rs 5,000 crore through share buyback offers of state-owned firms like Coal India, BHEL and Oil India Ltd.

Oil and Natural Gas Corporation Limited (ONGC)