This PSU Company Has Announced Record Date For Buyback

TCS share buyback led to a mix emotion among investors with many seeing their portfolios bagging profits per share upon tendering their share. Likewise, there is another chance by a PSU to hold its shares and bag some premium. At the current price of Rs. 167.5, the investors will be able to rake in a profit of Rs. 22.5 per share or over 13% return.

What is a buyback?

Share buyback or share repurchase is conducted by a listed company wherein it buys back its only share from the investors at a premium. This is primarily to reduce the supply of outstanding shares in the market and eventually push the share price higher.

GAIL buyback details

Buyback Type:	Tender Offer
Buyback Record Date:	Apr 22 2022
Buyback Offer Amount:	₹ 1082 Crores
Date of Board Meeting approving the proposal:	Mar 31 2022
Date of Public Announcement:	Mar 31 2022
Buyback Offer Size:	1.28%
Buyback Number of Shares:	5,69,85,463
Price Type:	Tender offer
FV:	10
Buyback Price:	₹ 190 Per Equity Share

 

Record date intimated

In its filing, the company has given out the record date i.e. the date basis which investors in the scrip may tender its shares as April 22, 2022. So, only if you have the company shares as on April 22, you will be eligible to tender the shares and bag gains.

Is GAIL otherwise a 'Buy'?

Earlier in February, Sharekhan has suggested a buy on the scrip for a target price of Rs. 196 per share. GAIL (India) Limited reported stellar Q3FY22 results with a large beat of 16%/24% in operating profit/PAT at. 4,228 crore/Rs. 3,288 crore, up 120%/121% y-o-y primarily led by stronger-than-expected earnings
growth in gas marketing/LPG-LHC segments, higher other income and marginally lower tax rate. Gas
marketing EBITDA grew strongly by 60% q-o-q to Rs. 1,750 crore (versus an EBITDA loss of Rs. 45 crore in
Q3FY21) led by a sharp improvement in gas trading spreads due to elevated spot LNG price while EBITDA
from LPG-LHC was at Rs. 875 crore (up 188% y-o-y; up 24.5% q-o-q) supported by 26% q-o-q increase in
LPG-LHC realisation and better volume (up 5% q-o-q with utilisation of 77% versus 74% in Q2FY22). Gas
transmission volume increased by 3.6% y-o-y with steady EBITDA at Rs. 1,256 crore (flat y-o-y) while
petchem performance was also good as it largely maintained EBITDA at Rs crore (up 1.7% q-o-q)
reflecting strong petchem realisations despite elevated spot LNG prices .