Buyback is a corporate action in which a company buys back its shares from the existing shareholders usually at a price higher than market price. When it buys back, the number of shares outstanding in the market reduces, according to definition on BSE.
Buybacks increase the percentage of shares a company owns by lowering the number of outstanding shares in the market.
Buybacks can be executed in one of two ways:
- A tender offer may be made to shareholders, giving them the choice to submit (or tender) all or a portion of their shares within a specified time frame and at a price higher than the current market price.
- Over a lengthy period of time, companies repurchase shares on the open market.
From preventing an unwelcome takeover bid to providing an additional exit route to shareholders when shares are undervalued or thinly traded, buybacks are beneficial for the companies as well as the shareholders in various ways.
Top 10 Buybacks of 2022
Here is the list of top 10 best buybacks of the 2022, as collated by online investment and financial planning platform Kuvera.
TCS
The IT giant Tata Consultancy Services (TCS) bought back shares worth ₹18.000 crore in 2022 by making a tender offer to the shareholders between 23 February and 9 March this year.
According to chittorgarh.com the issue size comprised of 40,000,000 shares priced ₹4,500 apiece with face value of ₹1 per share.
ACC
A mogul in cement industry, ACC Ltd purchased ₹11,259 crore worth of its own shares in through open market buyback between 28 August and 9 September.
As per data from chittorgarh.com ACC executed this buyback at a face value of ₹10 for each share with price not exceeding ₹2,300 per share.
Infosys
IT firm Infosys commenced its share buyback of worth ₹9,300 crore on 7 December and will continue till 6 June, 2023. Infosys' total buyback offer would be over 5.02 crore equity shares at a face value of ₹5 each. The buyback price should not exceed ₹1,850 per share.
The company will be implementing this buyback in open market through its free reserves.
Bajaj
Bajaj Auto issued a buyback of worth ₹2,500 crores in open market between 4 July to 10 October this year. The average price of share was set at rs ₹4,600 apiece with face value of ₹10.
UPL
UPL Ltd bought back shares worth ₹1,100 crore through open market stock exchange. The buyback was executed between 7 April and 20 May.
The buyback price stood at ₹875 per share.
GAIL
PSU Gas Authority of India Ltd (GAIL) issued a tender offer for 56,985,463 shares worth ₹1,082 crores to be executed between 25 March to 7 June this year.
The price of shares was set at ₹190 apiece with a face value of ₹10, according to data on chittorgarh.com.
One 97
One 97 Communications Ltd issued buyback of ₹850 crore through open market with share price of ₹810 per share. The buyback commenced on 21 December 2022 and will be executed by 19 June 2023.
Triveni Engineering & Industries Ltd
Triveni Engineering & Industries Ltd issued buyback of worth ₹800 crore for 22,857,142 shares via tender offer.
According to chittorgarh.com, the price of shares was set at ₹350 apiece with face value of ₹1.
Zydus
Zydus Lifesciences issues a tender offer for 11,538,461 shares at a price of ₹650 per share amounting to ₹750 crore. The transaction was executed between 23 June and 6 July this year.
MOIL
Miniratna MOIL Ltd, a government enterprise issued a tender offer for 33,842,668 shares between 28 January to 10 February.
The price of shares was pegged at ₹205 apiece accounting to total worth of ₹694 crore.
