SEBI Proposes Overhaul of Share Buyback Regulations; Invites Feedback

Securities and Exchange Board of India has proposed a major revamp of India’s share buyback framework, including the reintroduction of open-market buybacks through stock exchanges after such transactions were discontinued earlier this year. 

SEBI Proposes Faster Exchange-Based Buybacks 

The regulator has suggested amendments to the 2018 buyback regulations with the objective of simplifying compliance procedures and accelerating execution timelines for listed companies. 

Under the proposal, companies may once again be allowed to conduct open-market buybacks directly through stock exchanges. However, SEBI has proposed limiting the duration of such buyback offers to 66 working days. 

This marks a significant shift from earlier proposals that would have permitted buyback programmes to remain open for up to 6 months. 

The regulator has also retained the requirement for companies to deploy at least 40% of the earmarked buyback amount during the first half of the offer period. 

Regular Market Transactions and Compliance Changes 

SEBI has additionally proposed removing the requirement for a separate trading window for buybacks. Instead, transactions may be executed through the regular market mechanism. 

Another key proposal involves making the appointment of a merchant banker optional for buyback offers. Several procedural and compliance-related responsibilities may instead be handled directly by companies, stock exchanges and auditors. 

The regulator has also proposed mandatory electronic communication for shareholders. Under the revised framework, companies would need to send electronic intimations regarding the buyback offer to shareholders as of the public announcement date within one working day of the announcement. 

Promoter Restrictions and Shareholding Safeguards 

To strengthen oversight during buyback periods, SEBI has proposed freezing promoter shareholdings during the offer period in order to prevent trading activity. 

The regulator has also suggested restricting buybacks that may result in companies breaching minimum public shareholding requirements. 

The proposed framework is aimed at balancing operational flexibility for companies with stronger transparency standards and shareholder safeguards. 

Read More: SEBI Ends Investor Risk Reduction Access Platform for Stock Brokers with Immediate Effect! 

Conclusion 

The latest proposals reflect SEBI’s broader effort to modernise India’s share repurchase framework by making buybacks faster and more efficient while maintaining market discipline and investor protection measures. 

Want to read stock market updates in Hindi? Angel One News gives comprehensive share market news in Hindi.  

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.  

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.