State-owned Coal India said its subsidiary South Eastern Coalfields Ltd will buy back shares worth Rs 1,200.19 crore.
The move will help the government in realising its disinvestment target of Rs 56,500 crore for the fiscal.
“The board of directors of South Eastern Coalfields Ltd (SECL)… at its meeting held on June 14, has considered and approved the buyback of 8,46,359 fully paid equity shares of face value of Rs 1,000 each from the members of the company on a proportionate basis through tender offer,” Coal India (CIL) said in a BSE filing.
The SECL buyback will represent 23.53 per cent of the total number of equity shares in the paid-up share capital of the subsidiary for an aggregate amount not exceeding Rs 1,200.19 crore (maximum buyback size) being up to 25 per cent of the paid-up equity share capital and free reserves as on fiscal ended March 31, the filing said.
The buyback will be at a price of of Rs 14,180.57 per equity share payable in cash.
Buybacks help a company reduce equity by using idle cash and hence provide better returns to shareholders.
Coal India had recently informed bourses that two of its subsidiaries Mahanadi Coalfields and Northern Coalfields will buy back shares worth around Rs 1,978 crore from their shareholders.
CIL accounts for over 80 per cent of domestic coal production.