State-owned Oil and Natural Gas Corp’s (ONGC) Rs 4,022 crore share buyback programme will open on January 29 and close on February 11, the company said in its offer letter to shareholders.
ONGC’s board had on December 20 approved buyback of 25.29 crore shares for Rs 159 apiece as part of the Government plan to get cash-rich PSUs to part with their surplus.
The Government, which holds 65.64 per cent stake in the company, stands to gain about Rs 2,640 crore from tendering some of its shares in the buyback programme.
“The funds for the buyback will be met out of internally generated cash resources of the company,” it said.
ONGC said buyback is the acquisition by a company of its own shares. A buyback is an efficient form of returning surplus cash to the members holding equity shares of the company.
After considering the mutual benefits to the company and the equity shareholders, “the board decided to recommend buyback of not exceeding 25.29 crore equity shares representing 1.97 per cent of the total number of equity shares in the paid-up share capital of the company at a price of Rs 159 per share for an aggregate consideration of not exceeding Rs 4,022 crore,” it said.