Monika Gupta
Share buyback is considered as a mechanism in order to improve the stock price performance of the companies in the stock market. It is a process whereby a company purchases a certain percentage of own shares from the existing shareholders. It results in the reduction of the present stock of the company at the same time creating value for the remaining shareholders. Therefore buyback of shares is also regarded as a vital tool of financial restructuring by the firms especially in case of over capitalization.In India buyback of shares has been gaining its space. Large numbers of companies are using buyback of shares as an effective mechanism for corporate and financial restructuring. Table 1 presents the growth in buyback of shares in India.
Shares Buyback in India