- Buyback or share repurchase is a corporate action in which a company buys back its shares from their shareholders.
- Generally, companies buy back shares at a price higher than the current market price.
- Although, there are many methods of buyback; the two most popular methods of buyback are: -
- TENDER OFFER: -
- The company makes a direct offer to shareholders to buy back its shares at a particular fixed price/offer price at which the shareholders can tender/sell their shares.
- The amount is credited directly to shareholder’s primary bank a/c.
- Investor can apply for buyback (tender offer) through Jainam.
- The company can buy back its shares by actively buying from sellers on the stock exchange at the current market.
- Such buyback offer can last for months to ensure that there is no significant price movement due to the buying activity by the company.
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