GAIL Approves Rs 1,083-crore Share Buyback Offer. Key Details Investors Must Know

State-run GAIL on Thursday approved the buyback of the fully paid-up equity shares. The company said that it it intends to buyback Rs 1,082.72 crore worth shares of the company under a share buyback plan. GAIL will buyback shares not exceeding 5,69,85,463 of face value of Rs 10 each at a price of Rs 190. Shares of GAIL were trading 0.59 per cent higher at Rs 154.30. The buyback price is at a 24 per cent premium over Wednesday’s closing price of Rs 153.40. GAIL’s buyback price of equity share is at a 24 per cent premium on the previous day close price at NSE

The company has fixed Friday, April 22, 2022, as the record date for the purpose of ascertaining the eligibility of shareholders for buyback of equity shares. The buyback will be offered on a proportionate basis through a tender offer route in accordance the Sebi Regulations, 2018. The shares of government-owned natural gas corporation were trading over 1 per cent higher at Rs 155.05 at 12:28 pm.

GAIL Share Buyback Details

The size of the company’s buyback offer represents 2.50 per cent the aggregate of the fully paid-up equity share capital and 2.22 per cent of free reserves as per the audited standalone and consolidated FY21 financial statements of the company.

It will be offered on a proportionate basis through a tender offer route in accordance with the Sebi Regulations, 2018.

GAIL Shareholding Pattern

According to the pre-buyback shareholding pattern of the Company as on Friday, March 25, 2022, the government held a 51.45 per cent stake in GAIL, FPIs 19.37 per cent and mutual funds 9.09 per cent.

What is Share Buyback?

A tax-effective way to reward the shareholders, under the share buyback or share repurchase offer, a company buys back its own shares from investors or stakeholders.

Previous Buybacks by GAIL

GAIL had done a share buyback in 2020-21, from which the government received Rs 747 crore. The company bought back over 6.97 crore shares or 1.55 per cent of the total paid-up equity. The price was then fixed at Rs 150 a share.

Starting out in 1984 as a natural gas transmission firm with a single cross-country trunk pipeline, GAIL has now become the flagship natural gas company of India.

It is the largest integrated natural gas marketing and transmission company having its presence along the entire natural gas value chain comprising gas transmission and marketing, LPG transmission, gas processing, petrochemicals, LNG imports, exploration and production, and city gas distribution (CGD).

GAIL owns and operates around 13,840 km of natural gas pipeline network which is 74 per cent of the total length of the cross-country natural gas pipeline network in 28 States and Union Territories.

GAIL is the leading gas marketing company in India accounting for around 52 per cent of natural gas and 44 per cent of LNG sold in India.

The company supplies 67 per cent of gas consumed in the fertiliser sector, 53 per cent in power and 60 per cent in CGD in India. Its LNG portfolio is over 14 MTPA (million tonnes per annum).

The PSU has also embarked upon alternate energies like green hydrogen, renewables and bio-fuels projects which are of national importance and would likely provide a transition to the future.

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