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The share buyback programme of the state-controlled Oil and Natural Gas Corporation Ltd (ONGC), worth Rs 4,022 crores, will commence from January 29, 2019, and will end on 11 February 2019.
The company in its offer letter to shareholders said that the ONGC’s board had approved buyback of 25.29 crore shares for Rs 159 apiece on December 20, 2018. The share buyback programme is part of the government’s plan to tap cash-rich public sector undertakings to better utilize their surplus.
ONGC in its statement also said, “The funds for the buyback will be met out of internally generated cash resources of the company.” The letter added, “The buyback is expected to contribute to the overall enhancement of shareholder value and result in an increase in the return on equity of the company.”
The government, which controls 65.64 per cent stake in the company, will benefit Rs 2,640 crore from participating in the buyback programme. ONGC assured its investors that the buyback will not cause any material impact on the profitability/earnings of the company and will not in any manner impair its ability to pursue growth opportunities or meet its cash requirements for business operations.
