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NTPC board to consider buyback of equity shares on November 2

State-owned power giant NTPC on Monday said its board will on November 2 consider a proposal to buy back the company's equity shares

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NTPC

Press Trust of India  |  New Delhi 

NTPC

State-owned power giant on Monday said its board will on November 2 consider a proposal to buy back the company's equity shares.

Last week, markets regulator Sebi granted exemption to from certain buyback norms for the proposed merger of its wholly-owned subsidiaries with the parent company.

In October, had filed an application with the Securities and Exchange Board of India (Sebi) to seek exemption from the strict enforcement of the buyback norms.

The board in its meeting on November 2 will consider proposal for buyback of equity shares of the company, NTPC said in a BSE filing.

The application had been necessitated on account of a scheme of amalgamation providing for the merger of NTPC's wholly-owned subsidiaries with itself.

In November 2019, NTPC's board of directors approved a scheme of amalgamation entailing the merger of Nabinagar Power Generating Company Ltd and Kanti Bijlee Utpadan Nigam Ltd with NTPC.

For this, the company proposed to explore the possibility of buying back its equity shares from the existing shareholders on a proportionate basis through the tender offer route, subject to the requisite approval. However, such buyback will not be permitted under certain provisions of the buyback regulations as there is a scheme of amalgamation pending at the time of the public announcement.

The provision of buyback norms for which exemption is sought "prohibits the company from making any public announcement of buyback during the pendency of any scheme of amalgamation pursuant to the provisions of the Act, 2013," Sebi noted.

Sebi had considered NTPC's application and noted that the proposed buyback, as per NTPC, will be in the interests of investors as the shareholders of the company will benefit from return of surplus cash through the buyback programme.

NTPC confirmed that there will be no new issue of equity shares or change in the shareholding pattern of the company consequent to the scheme of amalgamation with its wholly-owned subsidiaries.

Thus, the Sebi granted exemption to NTPC from ensuring compliance with certain provision of buyback norms.

It had also said the relaxation from the enforcement of the provision granted by Sebi shall not be construed as a relaxation from any other requirement under the buyback norms.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Mon, October 26 2020. 22:11 IST
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