Buy Back of Shares
Buy Back of Shares
A buyback helps a company reduce its share capital in a planned and compliant manner. Businesses use it to return surplus funds to shareholders, boost valuation metrics, or simplify their capital structure. Since buybacks are tightly monitored under the Companies Act and, in the case of listed entities, SEBI regulations, the process needs precise documentation and timely filings.
What We Assist With
• Eligibility check and buyback structuring
• Drafting Board and shareholder resolutions
• ROC filings and statutory documentation
• Preparing offer letters and shareholder communication
• Calculating buyback limits and financial thresholds
• Monitoring timelines and handling post-buyback filings
• Advisory for both private and listed companies
Why Companies Choose Buyback
• Distribute excess cash to shareholders
• Improve EPS and overall valuation
• Reduce outstanding share capital
• Consolidate promoter holding
• Restructure capital efficiently and compliantly
Frequently Asked Questions
It’s a process where a company purchases its own shares from existing shareholders, leading to a reduction in its paid-up share capital.
Common reasons include returning excess cash, improving EPS, strengthening promoter holding, or restructuring capital.
If the buyback is above 10 percent of paid-up capital and free reserves, a special resolution from shareholders is mandatory. Smaller buybacks can be done through a Board resolution.
Buybacks can be done from free reserves, securities premium, or proceeds of an earlier issue (excluding the same kind of shares).
Yes. The buyback cannot exceed 25 percent of paid-up capital and free reserves in a financial year. There are also limits based on debt-equity ratios.