Buy Back of shares mp - BUYBACK OF SHARES Project on Buy...

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BUYBACK OF SHARES Project on “Buy Back of Shares” 1
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BUYBACK OF SHARES Contents Sr.No. Topic Page No. 1. Introduction 1 2. Share buyback- An Overview 2 3.  Share buyback: Positive Aspects  3 4. Share buyback: Negative Aspects 4 5. Which companies should consider a share buyback 5 6. SEBI Regulations, 1998 for buyback of securities 6 7. Buyback through Tender Offer 7 8.  Buyback through Stock Exchanges 10 9. Buyback through Book Building 12 10.  Buyback by Private Limited Companies 15 11.  Conditions to be followed in case of buyback of shares 17 12.  Income Tax Laws for  buyback 20 13. Accounting for buyback of shares 21 14.  A buyback pricing model 23 15. Dividend or buyback which is better option 24 16.  27 17. Case Study 28 18. Conclusion 30 2
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19. Bibliography 31 INTRODUCTION Competitive forces with the unleashing of the liberalisation policies have made corporate  restructuring   as   a   necessity   for   survival   and   growth.   Operational,   financial   and  managerial  strategies   are  employed   to  maintain   competitive   edge  and  turnaround  a  sickened   performance.   Financial   restructuring   involves   either   internal   or   external  restructuring (i.e. Mergers and Acquisitions). In the internal restructuring an existing firm  undergoes through a series of changes in terms of composition of assets and liabilities.  Section 77A, 77B and 77AA now allow companies to buy back their shares following the  recommendations of committee on corporate restructuring, which was set up by the  government   to   propose   various   strategies   to   strengthen   the   competitiveness   of   the  banking and finance sector, companies are now allowed to repurchase their own shares.  This will enable the companies to catch up with other developed markets as part of the  government's moves to liberalize the local market and hence emerged the concept of  SHARE BUY BACK in the Indian corporate scenario.  Share Buyback is a financial tool for financial re-engineering.  It is described  as a  procedure   that   enables   a   company   to   purchase   shares   from   the   shareholders.   The  rationale behind buyback of shares is to boost demand by reducing the supply, which in  theory  should push the price  up. The  repurchase  of shares reduces  the  number of  shareholders, which in turn enhances the earnings per share (EPS), and thus improves  investors sentiments. 3
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This note was uploaded on 10/11/2010 for the course MANAGEMENT 32435 taught by Professor Naik during the Spring '10 term at Symbiosis International University.

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Buy Back of shares mp - BUYBACK OF SHARES Project on Buy...

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