What is Share Buyback?

What is share Buyback?

When a company repurchases its own share from the existing shareholder is called Buyback of shares.

The efforts by boards of directors to increase shareholder value often include buying back company stock.

Buyback is also known as a “share buyback” or “stock repurchase.” Similar to a dividend, a Buyback is a way to return capital to shareholders.

 

 

 

 

 

 

 

 

Buyback Methods 

 

 

 

 

 

 

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Tendor Offer :

  • Buyback Price is fixed
  • Number of shares to be bought back is fixed
  • Time frame Upto one month

Open Market Offer :

  • Maximum price of the buyback back is fixed
  • Number of share to be bought back is fixed
  • Time frame can be 3 months or more

How to participate in Buyback – Tender Offer

Letter of offer –

Company sends letter of offer via email on registered email ids or via physical post.

Through registered broker –

Eligible shareholders who want to tender his/her share in buyback, should send the duly filled tender form to his/her broker.

 

For an Example:

TCS announced Buyback 18 Aug, 2018

Buy Back Offer Deal 

Buyback Type: Tender Offer
Buyback Record Date: Aug 18 2018
Buyback Opening Date: Sep 06 2018
Buyback Closing Date: Sep 21 2018
Buyback Offer Amount: ₹ 16,000 Cr
Date of Board Meeting approving the proposal: Jun 12 2018
Date of Public Announcement: Jun 12 2018
Buyback Offer Size: 1.99%
Buyback Number of Shares: 76,190,476
FV: 1
Buyback Price: ₹ 2100 Per Equity Share

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