 "ONGC")
Shares of Oil and Natural Gas Corporation (ONGC) have moved higher by 5% to Rs 150, bouncing back 6% from the intra-day low of Rs 141 on BSE, after the company said its board will meet on Thursday, December 20, 2018, to consider a share buyback proposal.
“The meeting of the board of directors of the company is scheduled on 20/12/2018, inter alia, to consider and approve the proposal for buy-back of the fully paid-up equity shares of the company,” ONGC said in a regulatory filing.
The government, which holds a 67.48% stake in ONGC, is expected to participate in the share buyback.
The government is targeting a minimum Rs 50 billion through share buyback offers of state-owned firms like Coal India, BHEL and Oil India. Besides Indian Oil Corporation (IOC), at least half a dozen other central PSUs have disclosed share buyback programmes. Prominent among these include NHPC, BHEL, NALCO, NLC, Cochin Shipyard and KIOCL that could fetch the government a little over Rs 30 billion.
The primary objective of share buyback programme is to arrest the fall in the value of a stock by reducing the supply of the stock, which essentially pushes up the share price through a better P/E multiple.
The stock of ONGC hit a 52-week low of Rs 135 on December 11, 2018, has fallen 37% from its 52-week high level of Rs 213 on January 25 this year. Thus far in the calendar year 2018, ONGC underperformed the market by declining 26% against 5.5% rise in the S&P BSE Sensex till Thursday.
At 02:27 pm, ONGC was trading 4% higher at Rs 149 on BSE, against a 0.03% decline in the benchmark index. A combined 15.82 million equity shares changed hands on the counter on the BSE and NSE so far.
“The meeting of the board of directors of the company is scheduled on 20/12/2018, inter alia, to consider and approve the proposal for buy-back of the fully paid-up equity shares of the company,” ONGC said in a regulatory filing.
The government, which holds a 67.48% stake in ONGC, is expected to participate in the share buyback.
The government is targeting a minimum Rs 50 billion through share buyback offers of state-owned firms like Coal India, BHEL and Oil India. Besides Indian Oil Corporation (IOC), at least half a dozen other central PSUs have disclosed share buyback programmes. Prominent among these include NHPC, BHEL, NALCO, NLC, Cochin Shipyard and KIOCL that could fetch the government a little over Rs 30 billion.
The primary objective of share buyback programme is to arrest the fall in the value of a stock by reducing the supply of the stock, which essentially pushes up the share price through a better P/E multiple.
The stock of ONGC hit a 52-week low of Rs 135 on December 11, 2018, has fallen 37% from its 52-week high level of Rs 213 on January 25 this year. Thus far in the calendar year 2018, ONGC underperformed the market by declining 26% against 5.5% rise in the S&P BSE Sensex till Thursday.
At 02:27 pm, ONGC was trading 4% higher at Rs 149 on BSE, against a 0.03% decline in the benchmark index. A combined 15.82 million equity shares changed hands on the counter on the BSE and NSE so far.
