SAIL Board may decide on share buy-back on Feb 25 meet
New Delhi: Steel Authority of India (SAIL) is likely to decide on a share buy-back scheme at its next Board meeting scheduled on February 25, a source said.
The company, which was sitting on over Rs 6,000 crore cash pile, may announce to buy back shares from the government and other shareholders.
Government currently holds 85.82 percent stake in the steel-maker and is likely to tender maximum possible shares in the buy-back to raise funds that it could show as proceeds from disinvestment.
It had previously planned an Offer for Sale (OFS) of up to 10.82 percent of its stake this fiscal to make up for most its Rs 30,000 crore disinvestment target for 2012-13.
"SAIL is sitting on huge cash pile. The buy back of share will help government to mop up fund for meeting disinvestment target. The buy back may take place in March," he said on the condition of anonymity.
SAIL's shares today settled at Rs 78.95 apiece, up 0.38 percent over the previous closing in the BSE.
Under the buyback mode, the government can raise money by selling its equity in the company to the PSU itself.
The share buy-back is not connected with the proposed offer for sale (OFS) programme of the PSU, which the government may bring at a later date.
The government had last year included various options including buy back of shares to prune its stake in state-run firms. So far, no funds have been raised through the route.