State-owned hydropower producer NHPC, in a regulatory filing, on Friday said its offer to buy back shares worth R2,616 crore opened on Friday.
The buyback offer is R32.25 per share, 9% more than its closing price of R29.65 on Friday on BSE. The company has cash and equivalents of R7,434.9 crore as on March 31, 2016. The offer constitutes 7.33% of the paid-up share capital of the company.
The Centre holds 74.51% shares in the company as of December 2016. In April 2016, the Centre had raised R2,716.55 crore by selling 11.36% stake in NHPC.The company has appointed SBI Capital Markets as the manager to the buyback.
In CY 2016, firms spend more than R26,853 crore on buybacks, the highest since 2011. Of the R26,000-crore worth of buybacks in 2016-17, the share of PSU firms so far has been nearly 60%.
Of the R37,696.03 crore raised by the government through the disinvestment route in this financial year, around R15,585.57 crore has come through buybacks.
The government had budgeted to raise R56,500 crore in FY17 through divestments in PSUs and the strategic sale of shares. The target has been revised to R45,500 crore.
NMDC’s buyback offer of R7,519 crore has been the biggest so far this year. The buyback is the process by which a company repurchases its own shares from its shareholders.
The bought back shares are extinguished and the company’s equity base shrinks.
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Besides buybacks, the government has raised R6,331 crore through offers for sale in various public sector undertakings, another R6,000 crore through the second tranche of central public sector enterprises’ exchange traded funds.