Iron ore miner NMDC has sought shareholders' approval for amendment in its Articles of Association which will enable it to launch share buy-back offer, a move that is needed to conform with a government directive on the same.
"The proposal under reference is only seeking approval to amend the existing Articles of Association of NMDC to provide for an enabling clause for buyback of shares and securities," NMDC said in a letter to shareholders ahead of its annual general meeting on September 20.
The company, however, said that the buyback of shares, if any, would be undertaken by the company following approval of the Board or the Steel Ministry and other statutory bodies.
Shares of NMDC shares today settled at Rs 193.40 per share, up 3.53% over the previous closing in the BSE.
NMDC said an amendment was needed as existing Articles of Association said, "No part of the funds of the company shall be employed in the purchase of or in loans upon the securities of the company's shares".
The Department of Public Enterprises (DPE) in March had directed all Central Public Sector Enterprises to amend their Articles of Association to provide for buyback of shares, if such provisions does not exist in their articles.
The DPE directive had also stated that if a CPSE decides to buyback its own shares from the shareholders using surplus cash, the Disinvestment Department in the Ministry of Finance may offer Government's equity in the firm on behalf of the Government.