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gail: GAIL will buy back Rs 1.1k crore stock at 24% premium | India News

NEW DELHI: State-run gas utility GAIL Ltd on Thursday announced a Rs 1,083- crore share buyback plan for 5.7 crore scrips at Rs 190 each, marking a premium of roughly 24% on Wednesday closing price on the NSE. This is the second buyback in as many years and will benefit the government as it holds 51.8% in India’s largest gas company.
The government had in 2020-21 gained Rs 747 crore in a Rs 1,046 crore buyback announced by GAIL. The total number of shares represents 2.5% of the company’s paid-up capital and free reserves as on March 31, 2021, GAIL said. A buoyant bottom line is the driving force behind the share buyback, considered a tax-efficient way of rewarding shareholders. Buybacks are attractive in tax terms even after considering the 10% tax on long term capital gains.
India’s largest gas company has been consistently rewarding its shareholders through regular dividends, issue of bonus shares and also buyback of shares at a premium. During the current financial year, the company paid the highest-ever interim dividend of Rs 3,996 crore at the rate of 90% of the face value. It issued bonus shares in 2008-09, 2016-17, 2017-18 and 2019-20. In March 2021, it completed buyback of 6.9 crore shares at Rs 150 each.

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