A buyback, also known as a repurchase, is the purchase of its own outstanding shares by a company leading to a reduction in the available free float shares. Companies buyback shares for a number of reasons such as return of excess cash to shareholders, increase the value of shares when they believe the market price is below its intrinsic value or at times to thwart any hostile takeover attempts by rival shareholders.
By reducing the number of shares outstanding in the market buybacks help increase the value for astute investors who believe in the long term prospects of the company. A buyback is often resorted to in lieu of dividends as it helps improve the balance sheet return metrics and creating space for future capital raising if required.
1. Tender offer - shareholders will have the option to submit (or tender) a portion or all of their shares within a certain time frame and at a premium to the current market price. This premium compensates investors for tendering their shares rather than holding on to them.
2. Market offer - companies buy back shares on the open market over an extended period of time.In the both offers viz. Wipro and Infosys, respective companies are following the tender route.
1. Customer needs to log into his/her account from SBISMART web platform and select Buyback option available under trade menu
2. SBI Smart Mobile user needs to select Buyback option available under backoffice menu.3. Customer can also place Buyback order through our trade and Call dealing desk number 1800-2099-345.