New Delhi: After facing difficulty on disinvestment front in the current financial year, the Union Government has already started preparation for the next FY. The Government has directed all listed companies to get ready to buy government equity. To meet the disinvestment target of Rs 30,000 crore in next FY, the Government seems to be relying on buyback.

Sources tell that the Government does not want to rely on the state of state market. Due to this reason, the disinvestment target of Rs 40,000 crore has not been met in FY 2011-12. Hence, the Government has adopted buyback strategy in PSUs to achieve the disinvestment target.

According to sources, Department of Public Enterprises (DPE) has written to the concerned ministries to prepare proposal for this purpose. The DPE has written to the concerned secretaries of different ministries that if PSUs are not having provisions for buyback in their ‘Article of Association’ then they should make necessary amendments for the buyback. ‘Article of Association’ is prepared at the time of company set up. It contains rules and regulations for the operation of company.

The PSUs listed on stock market do not exercise the option of buyback as the listed private limited company does. Private sector companies do buyback to maintain interest of investors into their shares. Buyback helps companies in long term and they can raise funds in future in need.