On Tuesday, shares of GAIL (India) rose as much as 5.7% to hit a fresh 52-week high of Rs 143.50 on NSE. The company's said in a stock exchange filing that its Board of Directors is set to meet on 15 January 2021 to consider the buyback of fully paid-up equity shares and to declare an interim dividend for the financial year 2020-21.
"The company's board will meet on January 15 to consider share buyback and also payment of interim dividend for the fiscal year ending March 2021," GAIL said in an exchange filing.
A share buyback is where a company offers to repurchase outstanding shares from shareholders to reduce the number of shares available in the open market. The reason to offer buyback could also be to reward shareholders by returning surplus cash held by the company.
Media reports suggest that the Indian-government, which holds 52.1% of the natural gas processing and distribution company, is likely to participate in the buyback like it did in the case of NTPC, Engineers India, RITES and KIOCL.
As per a PTI report, the government has asked at least eight state-run companies to consider share buybacks for it to raise fund to meet this financial year's fiscal deficit amid COVID-19.
Shares of GAIL have surged 66% in the last 3 months on expectations of healthy momentum in the January-March quarter, good pet-chem demand outlook and recovery in international oil prices.