Govt approves buyback of PSU shares

The government on Thursday approved the proposal for expediting disinvestment through the buyback route under which blue chip state-owned companies will buy its stake.

The government on Thursday approved the proposal for expediting disinvestment through the buyback route under which blue chip state-owned companies will buy its stake.

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The decision was taken by the Cabinet headed by Prime Minister Manmohan Singh, sources said.

The proposal will allow the governmentto raise funds by selling its stake in the PSU to the same undertaking.

The government had set a disinvestment target of R40,000 crore for 2011-12. It has been able to raise only R1,145 crore through stake sale in PFC. Its sale of stake in ONGC through the auction route is likely to fetch another R12,000-13,000 crore.