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Investment Schemes|Buy Back of
Securities
Buy Back of Securities
A company buy back its shares in any one of the
undermentioned manners even without shareholders' resolution to the extent
of 10% of paid up equity capital and reserves. For 25% buy back, it has to
get approved by Shareholders Resolution as specified in Section 77 A of
Companies Act, 1956.
The listed companies requires intimation to the stock exchange of general meetings and resolutions passed thereof. The informations can be obtained from the stock exchanges.
SEBI issues a press release and the offer document is put on the SEBI website when buyback offer document or public announcement is filed.
FAQs on Buy Back of Securities
How does one tender ones Shares for buyback, in the tender offer method?
The company will send a tender/offer form to the shareholders. He/She will have to fill up the form as per the instructions of the company and enclose the documents asked for.
How does one participate in the buyback in case one does not receive the tender/offer form?
If one has not received the tender/offer form can make an application on plain paper stating folio number, name, address, number of shares held, share certificate number, distinctive numbers, number of shares tendered, together with the original share certificate and tender it at the collection centres/registrars.
Can you tender your shares for buyback if you are not a registered shareholder?
Yes, but you have to submit the duly executed transfer deed for transfer of shares in your name, along with the offer form and other relevant documents. It should also be sent to the registrar to the buyback offer.
What is the manner in which the company decides the acceptances from each shareholders?
If the shares are tradable compulsorily in demat segment, the acceptances from any investor shall be on a proportionate basis irrespective of the number of shares tendered in the buyback, and irrespective of whether shares are in physical or demat form.
If it is not then, the entire shares tendered being less than the minimum market lot shall be accepted in full. Next, the acceptances will be on proportionate basis in a manner to ensure that the acceptances are in market lot. In this case, a draw of lots shall be done, as in public issues.
When will the shareholder receive intimation about acceptance of his shares?
Within 15 days from the closure of the offer.
When will the shareholder receive the consideration/the share certificate?
Within 21 days from the closure of the buyback offer.
- From the existing shareholders on a proportionate basis through the tender offer;
- From open market through:
- Book building process
- Stock exchange,
- From odd lot holders.
The listed companies requires intimation to the stock exchange of general meetings and resolutions passed thereof. The informations can be obtained from the stock exchanges.
SEBI issues a press release and the offer document is put on the SEBI website when buyback offer document or public announcement is filed.
FAQs on Buy Back of Securities
- How does one tender ones Shares for buyback, in the tender offer method?
- How does one participate in the buyback in case one does not receive the tender/offer form?
- Can you tender your shares for buyback if you are not a registered shareholder?
- What is the manner in which the company decides the acceptances from each shareholders?
- When will the shareholder receive intimation about acceptance of his shares?
- When will the shareholder receive the consideration/the share certificate?
How does one tender ones Shares for buyback, in the tender offer method?
The company will send a tender/offer form to the shareholders. He/She will have to fill up the form as per the instructions of the company and enclose the documents asked for.
How does one participate in the buyback in case one does not receive the tender/offer form?
If one has not received the tender/offer form can make an application on plain paper stating folio number, name, address, number of shares held, share certificate number, distinctive numbers, number of shares tendered, together with the original share certificate and tender it at the collection centres/registrars.
Can you tender your shares for buyback if you are not a registered shareholder?
Yes, but you have to submit the duly executed transfer deed for transfer of shares in your name, along with the offer form and other relevant documents. It should also be sent to the registrar to the buyback offer.
What is the manner in which the company decides the acceptances from each shareholders?
If the shares are tradable compulsorily in demat segment, the acceptances from any investor shall be on a proportionate basis irrespective of the number of shares tendered in the buyback, and irrespective of whether shares are in physical or demat form.
If it is not then, the entire shares tendered being less than the minimum market lot shall be accepted in full. Next, the acceptances will be on proportionate basis in a manner to ensure that the acceptances are in market lot. In this case, a draw of lots shall be done, as in public issues.
When will the shareholder receive intimation about acceptance of his shares?
Within 15 days from the closure of the offer.
When will the shareholder receive the consideration/the share certificate?
Within 21 days from the closure of the buyback offer.