Mining giant NMDC and manganese miner MOIL have announced share buyback programmes worth close to Rs 8,400 crore, a major portion of which will go to the government, which owns 80 per cent in both the PSUs.
The move will help the government in realising its disinvestment target of Rs 56,500 crore for the fiscal.
India’s largest iron ore miner NMDC today said its Board has approved the proposal to buyback by the company shares not exceeding 80.08 crore representing 20.20 per cent of the total number of equity shares at a price of Rs 94 for an aggregate consideration not exceeding Rs 7,527.76 crore.
The Board of Directors noted the intention of the Promoter of the Company to participate in the proposed buyback, it said in a regulatory filing.
Similarly, MOIL in a filing said its Board has given the go ahead for buyback by the company up to 3.48 crore shares representing 20.72 per cent stake at a price of Rs 248 for an aggregate consideration not exceeding Rs 863.34 crore. The Promoter will also participate in the buyback.
As at the end of March 2015, NMDC had a cash balance of Rs 18,443 crore, Nalco (Rs 4,628 crore) and MOIL (Rs 2,830 crore).
Together with the share buyback announced by Nalco, the government is set to earn a major chunk of the over Rs 11,200 crore share buyback programmes announced by these state-owned firms.
Last month, aluminium maker Nalco said its board has approved a proposal to buy back 64.43 crore shares worth close to Rs 2,835 crore.
This will include buy back of 64.43 crore shares at a price of Rs 44 apiece. Government holds 80.93 per cent in NALCO.
The Department of Investment and Public Asset Management (DIPAM), previously known as Department of Disinvestment, has been asking such cash-rich PSUs to utilise surplus cash in either capex or buy back.
After the announcement of the share buyback, NMDC and MOIL scrips were trading in the red on BSE.
NMDC shares were down 0.65 per cent to Rs 91.05 while that of MOIL were trading at Rs 240.20, down 1.19 per cent at 1130 hrs.