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Big Buybacks of the Public Sector Units
Sep 23, 2016


A share buyback typically indicates promoters' efforts to enhance intrinsic value of the stock. But the promoter group we are referring has other motivations to opt for the buyback program. We are referring to government, which is looking for better ways to milk its stakes in the companies.

Historically, various plans of government's stake sales (disinvestment) had hit a stone wall. In 2015-16, the government had set a record target of raising Rs 695 bn through disinvestment, but only managed Rs 321 bn. To avoid a repeat of last year, it is exploring a new strategy. It is expecting the cash PSUs to use the cash in buybacks.



Data Source: Economic Times

This Chart Of The Day was published in The 5 Minute WrapUp - The 'Balance Sheet Investing' Way to Sensex 40,000

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