look news india
Ahmedabad: A wave of share buyback has hit the stock market in August 2024. So far this month, 11 companies have raised Rs. 5388 crore shares have been bought back. According to Prime Database data, the amount of share buyback in rupee terms is the highest in 14 months. Under buyback, companies buy back the shares they hold from investors at a certain price. Usually this price is higher than the current share price. In December 2022, 9 companies raised Rs. 10,606 crore shares were bought back.
Among individual companies, Indus Towers, Aurobindo Pharma, Welspun Living, TTK Prestige and Navneet Publications raised Rs. 4491 crore worth of shares bought back. Currently, the buyback offers of the remaining six companies – Symphony, Cera Sanitaryware, Savita Oil Technologies, Dhanuka Agritech, Chaman Lal Setia Exports and AIA Engineering – are still open and are set to close on August 30.
In addition, 10 other companies, including Aarti Drugs, Transport Corporation of India, Nucleus Software Exports, KDDC, Technocraft Industries (India) and Mayur Uniquoters, have approved share buyback proposals, but the timetable for the buyback has not been announced yet. All these companies have announced share buyback on a proportionate basis through tender offers.
Analysts attribute the rise in share buyback volumes to significant changes in India’s share buyback tax regime from October 2024. According to the new rules in the Budget presented in July, the tax burden on buybacks will be shifted from companies to shareholders and investors will be taxed as dividends as per individual tax slabs.
At present, buyback companies have to pay more than 20 percent buyback tax. At the same time, shareholders do not have to pay any tax on the offer of their shares.
