Business Today
Loading...

Oil India stock closes lower after Moody's terms Rs 1,085-cr share buyback as 'credit negative'

The Oil India stock fell as much as 2.9 percent to Rs 199.2, its lowest in 10 days in trade today. The stock has fallen after four days of consecutive gains. The large cap stock has lost 18.07% during the last one year and fallen 19.26% since the beginning of this year.

twitter-logo BusinessToday.In        Last Updated: November 26, 2018  | 17:33 IST
Oil India stock closes lower after Moody's terms Rs 1,085-cr share buyback as 'credit negative'

The Oil India stock closed lower in trade today after Moody's said company's proposal last week to buy back shares worth around Rs 1,086 crore is 'credit negative'.  The stock closed 2.24% lower at 200.40 on the BSE.

The Oil India stock fell as much as 2.9 percent to Rs 199.2, its lowest in 10 days in trade today.  The stock has fallen after four days of consecutive gains. The large cap stock has lost 18.07% during the last one year and fallen 19.26% since the beginning of this year.

Moody's expects company's net borrowings to increase to Rs 11,000 crore by March 2019, up from Rs 9,000 crore as of March 2018.  Oil India will buy back 5.04 crore of its shares for a little over Rs 1,085 crore as part of the government's push to cash-rich PSUs to part with their surplus either by paying higher dividends or through share buybacks so as to help meet revenue targets.

Net borrowings increase is also driven by expectation that company will continue to pay high shareholder dividends and have higher capital spending in fiscal year ending March 2019, Moody's said.

In a regulatory filing, OIL said its board has approved buyback of shares at an aggregate of no more than 10 per cent of the fully paid-up equity share capital and free reserves of the company.

The board approved "the buyback by the company of its fully paid-up equity shares of Rs 10 each not exceeding 5.05 crore equity shares (representing about 4.45 per cent of the total number of equity shares in the paid-up share capital of the company) at a price of Rs 215 per equity share payable in cash for an aggregate consideration not exceeding Rs 1085.72 crore," it said.

The nation's second largest oil explorer had a little less than Rs 20,000 crore of reserves.

The government is targeting a minimum Rs 5,000 crore through share buyback offers of state-owned firms like Coal India and BHEL.

Youtube
  • Print

  • COMMENT
BT-Story-Page-B.gif
A    A   A
close