Mockery of divestment

PSU share buybacks could lead to an investment squeeze

In recent comments to the media, the Union economic affairs secretary has suggested that the government may seek to meet the disinvestment target that it set for itself in the Union Budget for 2018-19 in part through buybacks of shares by public sector undertakings, or PSUs. In other words, PSUs would pay the government for the shares it holds, reducing the number of their shares in circulation. While the effect on government shareholding will depend upon the final construction of the repurchase programme, it seems nevertheless that a move is afoot for oil sector PSUs in particular to buy ...