Monday, March 1, 2021
  • About us
  • Contact
  • Privacy Policy
  • Sitemap
Business Khabar
  • World
  • Latest News
  • Business
    • Automotive
    • Industries
    • Opinion
  • Market
  • Tech
  • Money
    • Finance
    • Insurance
    • Investments
    • Schemes
  • Startups
  • Other
    • Top Stories
    • Entrepreneur
    • Career
    • Real Estate
No Result
View All Result
Business Khabar
  • World
  • Latest News
  • Business
    • Automotive
    • Industries
    • Opinion
  • Market
  • Tech
  • Money
    • Finance
    • Insurance
    • Investments
    • Schemes
  • Startups
  • Other
    • Top Stories
    • Entrepreneur
    • Career
    • Real Estate
No Result
View All Result
Business Khabar
No Result
View All Result
Home Business Industries

Share Buyback: Confused on share buyback? Investor remember these tips

TCS and Wipro announced the buyback this month.

Nisha Chawla by Nisha Chawla
December 25, 2020
in Industries
0
Republic Day Special: Include these freedom stocks in the portfolio, can get up to 41% return
585
SHARES
3.3k
VIEWS
Share on FacebookShare on Twitter

Companies that have more cash surplus decide the share buyback. IT sector giants like TCS had recently announced a share buyback of 16 thousand crores and Wipro 9500 crores. Earlier in 2018 too, TCS announced a share buyback of 16 thousand crores. Under share buyback, the company buys back its shares in the market. The buyback reduces the number of shares of the company in the open market. The company does buyback because the number of shares available in the market increases due to the decrease in the number of shares in the open market and as a result the value of the shareholders also increases. This also increases returns. Shareholders get the advantage that companies buyback at a premium price (higher than the current share price).

Trust in the company increases

Analysts believe that unless the stock is undervalued, the decision to buyback should not be taken by the management. When a company decides on a share buyback, it shows that the company has sufficient capital. The buyback decision gives shareholders confidence that the company will benefit if it has more cash, rather than reinvesting it in any other assets.

TCS and Wipro have done buyback this month

TCS had decided to buyback at a price of Rs 3000 per share, while its closing price on that day (7 October) was Rs 2737 per share. Similarly, Wipro also had a buyback at a price of Rs 400 per share, while its shares closed at Rs 375.75 on that day (October 13). Apart from TCS, Wipro, Sun Pharma, Supreme Petrochem, Emami, Dalmia Cement and Granules India Ltd have also announced share buybacks.

Airtel stock at 52-week high, can get 65% return; What are the reasons

There are two ways to buyback

There are two types of buybacks. One is the open tender offer from the current shareholders and the other the open market through the stock exchange. Most companies take the open market offer route. In the buyback done through the tender offer route, 15 percent of the shares have to be reserved to buy back from the small shareholders. Small shareholders means investors whose market value does not exceed 2 lakhs on record date.

Tips for investors

  • Investors should analyze the movement of share price immediately before the announcement of buyback. If there is a sharp rise in the stock price then investors should be careful.
  • Investors should also pay attention to the size, price and duration of the offer. If the buyback size is too low as compared to the total market cap of the company, one should not expect a significant change in the stock price after the buyback.
  • Investors should focus on debt-equity ratio. If the debt level is higher than the industry average, it means that in the near future, the company’s free cash flow will not be better.
  • Some investors prefer dividends more than buybacks as it is more tax-efficient.

Source: www.financialexpress.com

#Share #Buyback #Confused #share #buyback #Investor #remember #tips

You might also like

Mutual Funds: What are floater funds, investors are placing bets in hopes of high returns

HDFC Securities halted trading on the NSE for a while, citing technical difficulties; NSE and BSE said – Everything is normal

RIL’s Big Deal; SkyTran’s stake rises to 54%, what is the whole issue

Tags: buybackinvestment tipsshare buybackShare buyback tipsshare marketshare tipstcstcs buybackWiprowipro buyback
Nisha Chawla

Nisha Chawla

Related Posts

Floater Funds
Industries

Mutual Funds: What are floater funds, investors are placing bets in hopes of high returns

by Business News
March 1, 2021
Technical Glitch in Trading
Industries

HDFC Securities halted trading on the NSE for a while, citing technical difficulties; NSE and BSE said – Everything is normal

by Business News
March 1, 2021
RIL Deal With SkyTran
Industries

RIL’s Big Deal; SkyTran’s stake rises to 54%, what is the whole issue

by Business News
March 1, 2021
Warren Buffett tells abut his 11 billion dollar mistake bond investors in his latest letter
Industries

Warren Buffett reveals his $ 11 billion mistake, warns bond investors

by Business News
February 28, 2021
nine of top ten companies market cap reduced by nearly 2.2 lakh crore only RIL benefitted
Industries

M-cap of 9 of the top 10 companies fell by about Rs 2.2 lakh crore, only RIL benefited

by Business News
February 28, 2021

Recommended

India's most fuel efficient automatic petrol cars under 9 lakh rupees

The highest mileage petrol cars, priced below 9 lakhs; Check details

March 1, 2021
Gionee Max Pro launched in india know price specifications camera features

Gionee Max Pro India Launch: 6,000mAh strong battery; Price only Rs 6,999, learn specifications

March 1, 2021
Floater Funds

Mutual Funds: What are floater funds, investors are placing bets in hopes of high returns

March 1, 2021

Don't miss it

  • All
  • Startups
  • Share Market
  • Entrepreneur
India's most fuel efficient automatic petrol cars under 9 lakh rupees
Automotive

The highest mileage petrol cars, priced below 9 lakhs; Check details

March 1, 2021
Gionee Max Pro launched in india know price specifications camera features
Tech

Gionee Max Pro India Launch: 6,000mAh strong battery; Price only Rs 6,999, learn specifications

March 1, 2021
Floater Funds
Industries

Mutual Funds: What are floater funds, investors are placing bets in hopes of high returns

March 1, 2021
Covid-19 Vaccination how to register online for vaccination slot booking process know full steps process in detail
Tech

Covid-19 Vaccination: How to register online at home for vaccination; Slot Booking, Learn Full Steps

March 1, 2021
SBI Home Loan Rate
Investments

SBI Home Loan: Home loan interest rates at record low, processing fee 100% waived till March 31

March 1, 2021
Gold Investment
Money

Keeping 5-20% gold in portfolio, looking at risk, why is gold bond the best option? 10 big reasons

March 1, 2021
MSI, Maruti Suzuki sales, Maruti Suzuki India, maruti suzuki february 2021 sales, maruti suzuki february 2021 domestic sales, maruti suzuki february 2021 export, MSI, Alto, S-Presso, Swift, Celerio, Ignis, Baleno, Dzire, Ciaz, Vitara Brezza, S-Cross, Ertiga, XL6, super carry, gypsy, auto sales february 2021, car sales february 2021, auto industry, indian automobile industry
Automotive

Maruti Suzuki: double digit growth in sales of compact and SUV segment, total sales up 11.8% in February

March 1, 2021
Technical Glitch in Trading
Industries

HDFC Securities halted trading on the NSE for a while, citing technical difficulties; NSE and BSE said – Everything is normal

March 1, 2021
Business Khabar

Business Khabar provides the latest news about market, financial, tech, sports and business news from around the world.

Learn more

Categories

  • Automotive
  • Business
  • Car & Bike
  • Career
  • Entrepreneur
  • Fashion
  • Featured
  • Finance
  • Food
  • Health
  • India
  • Industries
  • Insurance
  • Investments
  • Lifestyle
  • Money
  • Opinion
  • Real Estate
  • Schemes
  • Share Market
  • Startups
  • Tech
  • Top Stories
  • Travel
  • World

Important

JIOMART FASHION

BUSINESS PLAN

ATUM 1.0 BIKE

UPCOMING IPO

VEGETABLE BUSINESS

MARUTI UPCOMING CARS

BUSINESSMEN STORY

Nureca IPO

BUSINESS AFTER LOCKDOWN

IPL COACH SALARY

CSC REGISTRATION

Recent News

India's most fuel efficient automatic petrol cars under 9 lakh rupees

The highest mileage petrol cars, priced below 9 lakhs; Check details

March 1, 2021
Gionee Max Pro launched in india know price specifications camera features

Gionee Max Pro India Launch: 6,000mAh strong battery; Price only Rs 6,999, learn specifications

March 1, 2021
Floater Funds

Mutual Funds: What are floater funds, investors are placing bets in hopes of high returns

March 1, 2021

Copyright © 2020 Business Khabar

No Result
View All Result
  • Home
  • Larest News
  • World
  • Share Market
  • Business
    • Automotive
    • Industries
    • Startups
    • Entrepreneur
  • Tech
  • Money
    • Schemes
    • Investments
    • Finance
  • Lifestyle
    • Fashion
    • Food
    • Health
    • Travel
  • Reviews
    • Car & Bike
  • Top Stories
  • Real Estate
  • Contact Us
  • About us

Copyright © 2020 Business Khabar

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.