Share Buybacks Explained: The difference between tender offer and open market buybacks - CNBC TV18
We often see companies announcing a buyback of their equity shares, leading to a surge in their prices. Larsen & Toubro, the infrastructure and engineering conglomerate recently announced a buyback of up to Rs 10,000 crore. Wipro recently concluded its Rs 16,000 crore share buyback. Piramal Enterprises has also approved a Rs 1,750 crore share buyback on Friday.NSEEven mid and small-sized companies like Aarti Drugs announced their second share buyback in two years. In this piece, we explain to you everything you need to know about share buybacks in 15 questions.What is a share buyback? And why do companies opt for it?A share buyback is when a company repurchases its own shares from existing shareholders to reduce the number of shares available on the open market.Why would a company buyback its own shares and not issue new ones? To increase promoter holding To support the share price and pay surplus cash to shareholders To increase the Earnings per Share as buyback reduces the number of...