GAIL buyback: Last date to tender shares ends today; know acceptance ratio here

GAIL buyback date: Last date to tender shares for GAIL's buyback is today, June 7, 2022. In late March, the gas marketing company had announced that it will buyback about 5.7 crore shares for Rs 1,083 crore. The company had said the idea was to use a healthy balance sheet to reward shareholders for the second time in as many years.  

Last, it spent Rs 1,046.35 crore on a similar share buyback in GAIL had in 2020-21. 

Buying back shares is considered a tax-efficient way of rewarding shareholders. The government owns a 51.80 per cent stake in the company and is likely to participate in the buyback. In the 2020-21 buyback, the government had received Rs 747 crore, as per news agency PTI. 

Manish Jeloka, Co-head Products & Solutions, Sanctum Wealth, says the buyback offer is lucrative, but acceptance ratio stands around 10% only.  

"GAIL's buyback offer is lucrative as the offered price is 25% above CMP. However, given the consolidated supply at the tender price (9x of the offer quantity), the acceptance ratio will be in the vicinity of 10-11%, rendering an arbitrage opportunity of 1-1.5%," said Jeloka.  

During the financial year 2021-22, the company paid the highest ever interim dividend of Rs 3,996 crore (at the rate of 90 per cent of the face value). GAIL had issued bonus shares in FY 2008-09, 2016-17, 2017-18 and 2019-20. In March 2021, it completed buyback of about 6.97 crore shares at Rs 150 apiece. 

Meanwhile, share of GAIL surged over three per cent to trade on the day's high of Rs 153.20 amid spurt in volume. Aound 1.25 pm, on the last day of GAIL buyback, the counter was trading higher by three per cent to Rs 152.65 per share on the BSE.