Photo of Shavya Kumbhat

Associate in the Capital Markets practice at the Mumbai office of Cyril Amarchand Mangaldas. Shavya advises clients on various capital markets transactions, including IPOs, QIPs, infrastructure investment trusts, buy-backs, private placements and rights offerings. She can be reached at shavya.kumbhat@cyrilshroff.com.

Buy-Backs by Listed Companies - Key Considerations

A listed company proposing to undertake a buy-back is required to primarily comply with the provisions of the Companies Act, 2013 (the “Companies Act”) and the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018 (the “SEBI Regulations”). However, a listed company is also required to ensure compliance with the requirements of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (the “SEBI Takeover Regulations”), the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Foreign Exchange Management Act, 1999, the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 and other applicable securities laws including in other jurisdictions.

As explained in our earlier blog, as prescribed in the SEBI Regulations, a listed company may undertake a buy-back of its shares and other specified securities through any of the following methods: (a) from the existing holders of securities on a proportionate basis through a tender offer; (b) from the open market either through the book building process or through the stock exchange mechanism; or (c) from odd-lot holders.
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