Share Buyback List in India

Share Buyback is a corporate action event in which a company chooses to repurchase its own shares from existing investors, at a specified price and, within a defined timeframe. It is a way for companies to return capital to shareholders, signal confidence in future prospects and manage their share capital more efficiently. Understanding buybacks, including how they affect valuations, tax treatment, and participation mechanics, is important for investors before they make investment decisions.

This page explains what a buyback is, how it works in India, the benefits and tax implications, and how you can check and participate in upcoming buyback offers using m.Stock.

A share buyback (also called share repurchase) is when a company repurchases its own shares from existing investors, typically at a higher price than the current market value. By doing this, the company reduces the number of shares available in the market, effectively increasing the ownership stake of remaining shareholders. Companies most often buy back shares to return surplus cash to investors and to signal confidence in their financial health.

For example, a company with strong cash reserves may announce a buyback at a premium to attract shareholders to sell back some portion of their holdings. This can indicate that management believes the shares are undervalued or that growth opportunities inside the business are limited.

Companies in India typically use two main types of buyback offers:

Tender Offer Buyback

In this method, the company offers to repurchase a fixed number of shares at a specified price (often above market value) from eligible shareholders. Investors nominate how many shares they wish to tender within the offer period. If more shares are tendered than the company intends to buy, an acceptance ratio proportionally determines how many of your tendered shares are accepted.

Open Market Buyback

Under this method, the company buys its shares directly from the stock exchange over a specific timeframe. The number of shares repurchased is set, but the price may vary with market movement. This route provides flexibility for companies that want to keep repurchase pace aligned with market liquidity.

Both options are governed by SEBI's Buyback Regulations, ensuring transparency and fairness in the process.

To participate in a share buyback, you must be a registered shareholder on the record date. This date is announced in the buyback circular and determines which shareholders are eligible to tender their shares.

To be eligible:

• You must hold fully paid-up shares on the record date.
• Your shares should be in your demat account, not pledged or under lock-in.
• Institutional and retail investors may have different ways of submitting tenders based on regulatory provisions.

Meeting the eligibility criteria does not guarantee acceptance. If a buyback is oversubscribed (more shares tendered than the company wants to buy), the acceptance ratio decides how many of your tendered shares are actually purchased.

Participating in a share buyback is straightforward but requires careful attention to dates and documentation:

• The company announces the buyback details, such as the price, size, record date and method.
• On the record date, shareholders holding the shares become eligible.
• During the tendering period, eligible investors submit their shares for repurchase through their broker or trading platform.
• If the buyback is oversubscribed, an acceptance ratio is applied. This determines the number of shares accepted from each participant.
• Accepted shares are debited from your demat account and the buyback consideration is credited to your bank account after necessary tax and TDS.
• Remaining shares (if not accepted) are returned to your demat account automatically.

This process is similar to how you might apply for an IPO or rights issue but focuses on selling shares to the company rather than raising capital.

Taxation on share buybacks in India changed significantly from 1 October 2024:

Before October 2024

Companies paid a buyback tax under Section 115QA, effective around 20% plus surcharge and cess, while shareholders received buyback proceeds tax-free.

After 1 October 2024

Under the Finance Act (No. 2), 2024, this tax regime was changed:

• The company no longer pays buyback tax.
• The entire amount received by the shareholder on buyback is treated as deemed income from other sources under Section 2(22)(f) and is taxable in the hands of shareholders at their applicable income-tax slab rate.
• The cost of acquisition of the bought-back shares is treated as a capital loss, which can be set off against future capital gains under current rules.
• Companies must deduct TDS (Tax Deducted at Source) at 10% for residents under Section 194, for amounts exceeding ₹10,000, and at applicable rates for non-residents, subject to DTAA (Double Taxation Avoidance Agreement) benefits.

This represents a major shift where investors (especially in higher tax brackets) may end up paying more tax on buyback receipts compared to selling shares in the open market, where capital gains tax rates may be lower.

Note: This is a simplified example to help you understand how the new tax rules work in practice. It does not include surcharge or cess for simplicity.

Scenario

• You purchased 120 shares at ₹250 each (total cost ₹30,000).
• A company announces a share buyback at ₹600 per share (total received ₹72,000) under a tender offer.
• You fall in the 30% tax slab.

Under the Old System (Before 1 October 2024):

• You received a total of ₹72,000 without any tax obligation.
• The company paid the applicable taxes under 115QA.

Under the Current System (Effective from 1 October 2024):

• The entire ₹72,000 you receive is treated as deemed dividend income under Section 2(22)(f), taxable in your income tax slab.
• At 30% tax, your tax liability = ₹21,600 (30 % of ₹72,000). The net amount after tax is ₹50,400.
• Your original cost of ₹30,000 becomes a capital loss of ₹30,000, which you can carry forward and set off against future capital gains.
• On the other hand, if you had sold the shares on the open market after 1 year of holding them, your tax liability would have been nil (as per the new long-term capital gains tax policy). Even if sold within a year, only 20% tax would have applied (as per the new short-term capital gains tax policy).

This illustration shows how the 2024 changes mean buyback proceeds are no longer tax-free. Instead, they are taxed fully as dividend income in the investor’s hands, which may make open-market selling more attractive for certain investors depending on their overall tax situation.

From April 1, 2026 (FY 2026‑27), share buybacks will no longer be taxed as ‘deemed dividend’ in the hands of investors. Instead, buyback consideration will be taxed under the Capital Gains head, and shareholders will pay tax only on their actual gains, i.e. the difference between the buyback price and their cost of acquisition.

For non‑promoter investors, long‑term capital gains (LTCG) on equity shares are taxed at 12.5%, subject to the applicable exemption limit on listed equity gains, while short‑term capital gains (STCG) on listed shares are taxed at 20% (STCG on unlisted shares continues to be taxed at applicable rates).

To curb tax‑driven buybacks by controlling shareholders, Union Budget 2026 also introduced an additional buyback tax for promoters, resulting in an effective tax rate of about 22% on buyback gains for domestic‑company promoters and 30% for non‑corporate & other promoters.

Additional income‑tax on gains from share buyback, applicable only to promoters (as defined under SEBI/Companies Act).

For domestic‑company promoters:

• LTCG: 12.5% normal rate + 9.5% additional tax = 22% effective on gains (before surcharge/cess).
• STCG (listed): 20% normal rate + 2% additional tax = 22% effective on gains (before surcharge/cess).

For non‑corporate / other promoters (individuals, HUFs, foreign, etc.):

• LTCG: 12.5% normal rate + 17.5% additional tax = 30% effective on gains (before surcharge/cess).
• STCG (listed): 20% normal rate + 10% additional tax = 30% effective on gains (before surcharge/cess).

Promoters pay normal capital‑gains tax plus an additional income‑tax on buyback gains (2–10% on STCG and 9.5–17.5% on LTCG), leading to an effective rate of 22% for domestic‑company promoters and 30% for non‑corporate & other promoters, excluding surcharge and cess.

Buyback proceeds are taxed under the Capital Gains head, and an additional income-tax applies specifically to promoters (as defined under SEBI / Companies Act).

Participating in a share buyback can offer several advantages for long-term investors:

• Premium Price: Buybacks are often announced at a premium to the current market price, rewarding investors immediately.
• Efficient Capital Return: Buybacks return cash directly to shareholders without dividends’ ongoing tax complexities.
• Potential EPS Improvement: By reducing outstanding shares, earnings per share may improve, which could support higher valuations.
• Flexibility: Investors can decide whether to tender based on personal financial goals and market expectations.
• Market Signal: A buyback can signal management’s confidence in future prospects, offering goodwill to shareholders.

However, after the tax changes, weighing the post-tax benefits against other options is important before participating.

On m.Stock, you can track all upcoming buyback offers and the buy back share list in one place. The platform provides:

• Latest announcements on upcoming buybacks and record dates.
• Alerts for buyback openings and tendering windows.
• Status of your participation, including accepted and rejected shares.
• Help to monitor TDS and post-buyback credit details once the transaction settles.

This makes m.Stock a useful tool for tracking buyback opportunities alongside your overall portfolio.