Press Esc to close
Tuesday 02 September 2014
News updated at 12:23 PM IST
Weather
Max: 27°C
Min : 20°C
In Bangalore
Generally cloudy

Sebi paper moots stronger norms for share buybacks

Jan, 1, 2013 DHNS:

Sebi on Wednesday put out a discussion paper envisaging major changes to the existing framework for buyback of shares by companies from open market.

Basically, Sebi proposals seeks to that ensure only serious companies launch a share buyback programme and thereby help protecting the interest of investors.

Accordingly, the market regulator proposes to make it mandatory for companies to buy back a minimum of 50 percent shares of the total targeted amount while the repurchase programme should be completed in three months from the launch date as against the current period of share buyback is 12 months. "To ensure that only serious companies launch the buyback programme, it is further proposed that these companies be mandated to put 25 per cent of the maximum amount proposed for buy back in an escrow account," the paper said.


Further, Sebi has sought comments on the paper titled 'Proposed modifications to the existing framework for buy back through open market purchase' till January 31, 2013. To make the norms stringent, it has suggested that the companies, which are unable to buyback all the targeted shares, should be barred from coming up with another repurchase offer for one year.

Sebi made it clear that "Listed companies coming out with buyback programs may not be allowed to raise further capital for a period of two years" while it also suggested that firms should disclose the number of shares purchased.

Despite the intention disclosed by firms at the time of making buyback offer, it is not used as an opportunity for enhancing the book value of the shares of the company, Sebi remarked on the buyback offer trends. The discussion paper noted that in 75 buyback cases through open market purchases closed during the last three financial years -- from April 01, 2007 to March 31, 2010 -- an average of 49.91 per cent of the maximum offer size was utilised by the companies for the buyback. 

Go to Top

Photo Gallery
President Pranab Mukherjee grants degree to a student at the 14th convocation of the University...

President Pranab Mukherjee grants degree to a student at the 14th convocation of the University...

Fireworks on the occasion of 410th installation anniversary of Sri Guru Granth Sahib, the holy...

Fireworks on the occasion of 410th installation anniversary of Sri Guru Granth Sahib, the holy...

Left Front activists take part in a rally to observe anti-imperialist day in Kolkata on...

Left Front activists take part in a rally to observe anti-imperialist day in Kolkata on...

Flood water flows through Srisailam dam after its four crest gates were opened in Kurnool on...

Flood water flows through Srisailam dam after its four crest gates were opened in Kurnool on...

BJP president Amit Shah during a visit to Sree Padmanabhaswamy temple in Thiruvananthapuram on...

BJP president Amit Shah during a visit to Sree Padmanabhaswamy temple in Thiruvananthapuram on...

Prime Minister Narendra Modi shakes hands with Japanese Minister of Foreign Affairs Fumio...

Prime Minister Narendra Modi shakes hands with Japanese Minister of Foreign Affairs Fumio...

Actress & BJP MP from Chandigarh Kirron Kher speaks during a seminar on...

Actress & BJP MP from Chandigarh Kirron Kher speaks during a seminar on...

Prime Minister Narendra Modi and Japan's Prime Minister Shinzo Abe makes a toast during a banquet...

Prime Minister Narendra Modi and Japan's Prime Minister Shinzo Abe makes a toast during a banquet...

Congress president Sonia Gandhi prays in a temple during a visit to her constituency Rae Bareli...

Congress president Sonia Gandhi prays in a temple during a visit to her constituency Rae Bareli...

Congress president Sonia Gandhi in a village hut during a visit to her constituency Rae Bareli on...

Congress president Sonia Gandhi in a village hut during a visit to her constituency Rae Bareli on...

Copyright 2014, The Printers (Mysore) Private Ltd., 75, M.G Road, Post Box 5331, Bangalore - 560001
Tel: +91 (80) 25880000 Fax No. +91 (80) 25880523