State-owned GAIL Ltd today informed the stock exchanges that its board will meet on 31 March to consider buyback of shares.
On Friday, GAIL shares closed 0.41% higher at ₹147.70 apiece on NSE.
“The meeting of Board of Directors of the Company will be held on Thursday, 31st March, 2022, to inter-alia consider Buy Back of the fully paid-up equity shares of the Company,” GAIL said in a filing.
GAIL, which imports and distributes gas, also operates India’s largest gas pipeline network.
“The trading window for dealing in securities will remain closed from Saturday, 26 March, 2022 till 48 hours after the date of Board Meeting wherein the financial results for the quarter and financial year ended 31 March would be considered and approved,” GAIL added.
What is a share buyback
Share buyback, or share repurchase, is when a company buys back its own shares from investors or stakeholders. It can be seen as an alternative, tax-efficient way to return money to shareholders.
Buybacks are attractive in tax terms even after considering the 10 per cent tax on long term capital gains (LTCG).
Usually, companies go for share buyback if it wishes to increase demand in the market. Share buybacks reduce the number of shares in circulation, which can increase the share value and the earnings per share (EPS).
Meanwhile, in other news Gazprom has asked GAIL (India) to pay for gas imports in euros instead of dollars, Reuters reported citing unnamed sources, in a sign the Russian energy giant seeks to wean itself away from the U.S. currency in the wake of the Ukraine conflict.
European countries and the United States have imposed heavy sanctions on Russia since Moscow sent troops into Ukraine on Feb. 24.
GAIL has a long-term gas import deal with Gazprom Marketing & Trading Singapore to annually buy 2.5 million tonnes of liquefied natural gas and has been settling trade with Gazprom in dollars.