Share buyback plan fails to lift NMDC, MOIL

NEW DELHI: News of share buyback by two public sector entities, NMDC and MOIL, wherein the two companies announced plans to buy back just over 20 per cent of their paidup capital for over $1 billion, failed to prop up their stocks on Wednesday.

Shares of MOIL closed lower by 1.44 per cent. The company’s board of directors has approved buyback of 20.72 per cent of equity shares at Rs 248 a share. The buyback price is set at a 2.02 per cent premium to Tuesday’s closing price of Rs 243.10 per share.

NMDC, whose board approved buyback of 20.2 per cent of equities at Rs 94 a share, closed lower by 1.76 per cent on Wednesday. The buyback price carried a premium of 2.56 per cent to the Tuesday’s closing price of Rs 91.65 per share.

"NMDC and MOIL will buy back 25 per cent of the paidup capital. A notification in this regard is expected shortly," a finance ministry official said.

The official said the government is expecting Rs 6,500 crore from the two share buybacks after considering the proportion of shares that may be tendered by public and promoters.

The board of directors noted the intention of the promoter of the company to participate in the proposed buyback, MOIL and NMDC said in separate regulatory filings to BSE. The government holds 80 per cent stake each in NMDC and MOIL.