State-run firms asked to buy back even when shares take a beating

Centre's move aimed at improving PSUs' stock performance

The Union government has asked public sector undertakings (PSUs) to opt for buybacks even when their shares underperform, a move that would signal to the market that their stock is more valuable than its traded value.

Companies announce share buybacks as a means to reward the investors by offering to buy shares from them, generally at a higher price. This is done when the company’s financial performance is good and it decides to utilise its excess capital on rewarding its shareholders, mostly the government, in case of PSUs.

However, PSUs have been told to opt for buybacks when their stocks take a