Gail India gains 4% as board considers share buyback on Thursday

Shares of Gail India jumped 4 per cent to Rs 153.25 on the Bahrain Stock Exchange in trading on Monday after the state-owned utility company announced that its board would consider a share buyback at its board meeting on Thursday, March 31, 2022.

Jill India said Friday, March 25, after market hours.

The stock rose for the fourth consecutive day and rose by 7 percent during the same period. at 02:06 p.m.; It rose 3 per cent at Rs 152.40, versus a 0.1 per cent rise in the S&P BSE Sensex. Volume at the net more than doubled with 21.3 million shares of NSE and BSE publicly traded stocks traded.

The primary objective of a stock buyback program is to stem the decline in the stock’s value by reducing the supply of the stock, which essentially raises the stock’s price through a better earnings-to-earnings (P/E) multiplier.

As of December 31, 2021, the Government of India owned 51.8 per cent of the shares of Gail India. Shareholder pattern data shows that foreign portfolio investors (FPIs) own 19.69 percent, while mutual funds hold 7.92 percent in the company. Besides, Indian Oil Corporation and Oil and Natural Gas Corporation (ONGC) own 2.47 per cent and 4.94 per cent respectively. The data shows that retail shareholders own 4.37 percent.

In the past three months, Gail India has outperformed the market with a 15 per cent rise, compared to a 1 per cent drop in the S&P BSE Sensex. The stock reached a 52-week high of Rs 171.35 on October 6, 2021.

The stock buyback will reward the minority shareholders. ICICI Securities said in a note that the attractiveness of the buyback will be determined when the buyback quantity and price are announced.

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