Buyback

 

 

What is the manner in which the company can buy back its own shares?

The company can buy back its shares in any of the following manners :

i. From the existing shareholders on a proportionate basis through the tender offer; ii. From open market through: a. Book building process b. Stock exchange,  

i. From odd lot holders.

  Can a company buyback its shares without passing shareholders’ resolution?  

Yes. A company may buyb yba ack its sh sha ares with tho out sh sha areholders’ resolution, to the ext xte ent of 10% of its paid up equity cap ca pita tall and reserves. However, if a co com mpany inte ten nds to buyb yba ack its shares to the exte ten nt of 25% of its paid up ca cap pita tall and reserves/ then the same has to be approved by Shareholders Resolution as specified in Section 77 A of Companies Act, 1956.

Where can one get details of companies proposing to buyback their shares?

ste ed co com mpanies are required to intim ima ate the st sto ock exchange of general meeti tin ngs and resolutions pass sse ed 1. List thereof. Hence, information on companies proposing to buyback shares may be obtained from the stock exchanges. When bu buyb yba ack of offe ferr do docu cume ment nt or pub ubli lic c an anno noun unce ceme ment nt is fi file led d wit ith h SE SEBI BI,, SE SEBI BI is issu sues es a pr pre ess re rele lea ase an and d th the e 2. Whe offer document is put on the SEBI website under primary market page under the head "buyback".

How does one tender ones Shares for buyback, in the tender offer method?

The co com mpany will send you a tender/off ffe er fo forrm. Yo You u will have to fill up the fo forrm as per th the e inst strructio ion ns of the co com mpany page: 1

[ www.sebi.gov.in ]

 

and enclose the documents asked for, by the company. How does one participate in the buyback in case one does not receive the tender/offer form?

You ca You can n ma make ke an ap app pli lica cati tion on on pla lain in pa pape perr st sta ati ting ng yo your ur fo foli lio o num umbe berr, na name me,, ad addr dres ess, s, nu numb mbe er of sh shar ares es he held ld,, sh shar are e cert ce rtif ific icat ate e nu numb mbe er, di dist stin inct ctiv ive e nu numb mber ers, s, nu numb mbe er of sh shar ares es te tend nde ere red d, to toge geth the er wit ith h th the e or orig igin inal al sh shar are e ce cert rtif ific icat ate e and tender the same at the collection centres/registrars, as mentioned in the public announcement. Can you tender your shares for buyback if you are not a registered shareholder? 

Yes, Ye s, pro rovi vide ded d yo you u su sub bmi mitt th the e du duly ly ex exec ecut ute ed tr tran ansf sfe er de deed ed fo forr tr tran ansf sfer er of sh shar are es in yo your ur na name me,, al alon ong g wit ith h th the e off ffer er fo form rm and ot and othe herr re rele leva vant nt do docu cume ment nts s as re requ quir ire ed fo forr tr tra ans nsfe ferr, if an any. y. Th The e sa same me sh sho oul uld d be se sen nt to th the e reg egis istr tra ar to th the e buy uyb bac ack k offer.

What is the manner in which the company decides the acceptances from each shareholders?

In ca case se th the e sh shar ares es of th the e co comp mpan any y ar are e tr trad adab able le co comp mpul ulso sori rily ly in dem emat at se segm gmen ent, t, th the e acc ccep epta tanc nces es fr from om an any y in inve vest stor or sha sh all be on a proportionate basis irrespecti tiv ve of the number of shares te ten ndered in the buyback, and irrespecti tiv ve of whether shares are in physical or demat form.

If the shares are not in compulsory demat segment, first the entire shares tendered being less than the minimum mark ma rket et lo lott sh shal alll be ac acce cep pte ted d in fu full ll.. Th Ther erea eaft fte er, th the e acc ccep epta tanc nces es wil illl be on pr prop opo ort rtio iona nate te bas asis is in a ma mann nner er to en ensu surre that the acceptances are in market lot. In such a case, a draw of lots shall be done, as in the case of public issues.   When will the shareholder receive intimation about acceptance of his shares?

The company is required to send intimation to the tenderers within 15 days from the closure of the offer.   When will the shareholder receive the consideration/the share certificate?

The company is required to send the above, within 21 days from the closure of the buyback offer.  

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