What is a Buyback?
A Buyback is a corporate action wherein a company repurchases a portion of its shares from the public (investors), usually at a price higher than the prevailing market rate (at a premium). A buyback generally indicates the company’s confidence in itself and hence, this usually impacts its share price positively.
They are commonly used for corporate restructuring, including:
- Consolidating stake in the company
- Reducing the number of shares available in the market
- Preventing a take-over
- Indication promoter confidence in the business
- Improving its share price, etc.
Important Dates during a Buyback Issue:
For example, the TCS Board of Directors approves a Rs. 16,000 crore buyback and related dates are announced.
Date | Details |
| Declaration Date: 7th Oct | The day the buyback is announced to the public. |
| Ex-Date: 26th Nov | To be eligible to participate in the buyback, purchases must be made on or before 25th Nov. Investors who purchase shares on or after the ex-date will not be eligible to participate in the buyback. |
| Record Date: 26th Nov | All shareholders of TCS as per company records on 26th Nov can participate in the buyback. |
| Buyback Window: 18th Dec - 1st Jan | Eligible shareholders will be intimated regarding the application window. If desired, shareholders can tender (all/a part) of their shares in exchange for cash during this window. If the total number of shares tendered is more than the issue size, shares are bought-back proportionately from each shareholder. The number of shares tendered for the buyback are blocked in the investor's demat account. |
| Payout Date | The day funds are credited to the registered back account of shareholders. Shares that have not been approved for the buyback will be unblocked in the investor's demat account. |
Since we have shifted to the T+1 settlement cycle, the ex-date and record date for corporate actions fall on the same day.Still need help? Create Ticket
