Nalco to buyback 25% shares

In what could make the government coffers richer by up to Rs 2,834 crore, public sector National Aluminium Company (Nalco) on Wednesday announced it would buy back 25 per cent shares. The decision has been approved by the board of directors of the company.

Nalco has become the first government-owned company to buy back shares, after the government had asked some of the companies to do so last year. The government holds 80.93 per cent stake in this company.

"The board of directors noted the intention of the promoter of the company to participate in the proposed buyback," said a regulatory filing by Nalco on BSE. The company would purchase up to 644.3 million shares at Rs 44. Nalco's shares closed at Rs 43.05 on Wednesday, up 1.65 per cent. To conclude this buyback, the Navratna company would also need to get shareholders' approval by way of a special resolution through a special ballot. According to the Companies Act, 2013, a special resolution is one passed by 75 per cent of the members present in person or by proxy.

Earlier, sources had said the government was looking to raise around Rs 3,250 crore by selling 25 per cent of its stake to Nalco, after its stake sale plans got derailed due to volatile markets. The government was planning to divest 10 per cent shareholding to raise about Rs 1,300 crore.