https://economictimes.indiatimes.co...-crore-share-buyback/articleshow/66236475.cms
I understand why private companies buyback stock. If a company doesn't have anything to spend money on, it's better to buy back stock & retire it - so that for the remaining owners, their ownership of the company goes up.
Dividends are taxed, so buybacks are another way of giving money to stockholders.
But for a PSU, I don't understand what is the point of this?
First is the PSU going to buybuck the shares & retire them or not?
Since govt is a big owner, will govt sell of it's own shares to the PSU during the buyback or not?
If Govt sells in a lesser proportion than the non-govt owners, then Govt's ownership of the PSU increases - I mean that's the reverse of disinvestment, right?
So what exactly is happening here?
I understand why private companies buyback stock. If a company doesn't have anything to spend money on, it's better to buy back stock & retire it - so that for the remaining owners, their ownership of the company goes up.
Dividends are taxed, so buybacks are another way of giving money to stockholders.
But for a PSU, I don't understand what is the point of this?
First is the PSU going to buybuck the shares & retire them or not?
Since govt is a big owner, will govt sell of it's own shares to the PSU during the buyback or not?
If Govt sells in a lesser proportion than the non-govt owners, then Govt's ownership of the PSU increases - I mean that's the reverse of disinvestment, right?
So what exactly is happening here?