SEBI’s Buyback Reform Proposal

A share buyback, also known as a share repurchase, is a corporate action through which a listed company purchases its own outstanding shares from existing shareholders. It is commonly used as a mechanism for returning surplus capital and improving shareholder value. Companies often undertake buybacks when they believe their shares are undervalued or when excess cash cannot be utilised efficiently for expansion or investment. In India, buybacks are regulated under Section 68 of the Companies Act, 2013 and the SEBI (Buy Back of Securities) Regulations, 2018. Listed companies may conduct buybacks through the tender offer route or the open market route. While the tender offer route involves purchasing shares from shareholders at a fixed price within a specified period, the open market route allows companies to repurchase shares directly through stock exchanges. Although the open market mechanism is widely accepted in global jurisdictions such as the United States and the United Kingdom,