Eligibility for buyback
To be able to participate in a buyback process, the investor should be have held the shares of the company before the record date declared by the company in its announcement for buyback. The shares should be held in demat form.
Tender of shares for buyback
The last date for tendering of shares for buyback is disclosed by the company in the notice. The shareholders need to submit their tender request by this date. This can be done by filling up a physical buyback form and mentioning the number of shares to be tendered for buyback and the price for buyback. The minimum number of shares that can be tendered is stated in the form. The shares can be tendered online using online broking platforms. The number of shares tendered for buyback are blocked for any further transaction.
Approval for buyback
Once the tenders are validated, the company will proportionately approve buyback requests of shareholders. The shares that have not been approved for buyback will get unblocked in the demat account of the shareholder. The consideration for shares bought back by the company will be credited in the registered bank account of the shareholder.
Points to note
- To be able to hold shares in demat form on record date, the shares need to be purchased at least 2 days before the record date.
- Retail category of investors (investment value of less than Rs 2 lakh) have 15% reservation in the total buyback offer.
(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)
