ONGC Approves Rs 40.22 Bn Share Buyback

Oil and Natural Gas Corporation Ltd. will buy back shares worth Rs 40.22 billion as the government seeks payouts from cash-rich public sector units to bridge fiscal deficit. India’s largest oil and gas explorer will repurchase up to 250 million shares, representing 2.35 percent stake, at Rs 159 apiece, according to its exchange filing. It set Jan. 4 as the record or cut-off date to ascertain which shareholders will be eligible.

The government, which owns 67.48 percent in ONGC, may get Rs 27.14 billion from the buyback, according to BloombergQuint’s calculations. It has identified at least 11 state-run entities to raise funds through buyback to bridge the budget gap. In all, it has a target to mop up Rs 800 billion this financial year through divestments. Shares of ONGC briefly fell after the announcement but recovered to trade 0.3 percent higher at 3:15 p.m. compared with a 0.1 percent decline in the benchmark Nifty 50 Index.