Markets regulator Sebi will gradually eliminate share buybacks through stock exchanges by April 2025, reported Mint on Wednesday.
"The Securities and Exchange Board of India (Sebi) will create a separate window on the stock exchanges to conduct buybacks until then. The regulator also increased the minimum utilization of funds allocated for buybacks through the stock exchange to 75 percent from 50 percent," said the Mint report.
“These amendments aim to streamline the process of buyback, create a level-playing field for investors and promote the ease of doing business," Sebi chairperson Madhabi Puri Buch was quoted as saying after a board meeting on December 20.
A share buyback is a type of financial transaction in which an organization uses cash to buy back its previously issued shares from the market.
When a business buys back its own stock, it lowers the total number of outstanding shares. Repurchased shares are either cancelled or kept in the company's treasury because a corporation cannot be its own shareholder.
Meanwhile, Sebi also approved the recommendations of a working group on improving governance standards at exchanges—new rules include increased accountability of directors, stricter investment policy and data sharing, reported Mint.
