SEBI is planning a significant overhaul of Indiaโs buyback framework and I believe everyone should know these changes.
What stands out is that SEBI is trying to balance Ease of doing business and stronger investor protection. Here are the 7 major proposals:
๐. ๐ก๐ผ๐๐ถ๐ณ๐ถ๐ฐ๐ฎ๐๐ถ๐ผ๐ป ๐๐ผ ๐ฆ๐ต๐ฎ๐ฟ๐ฒ๐ต๐ผ๐น๐ฑ๐ฒ๐ฟ๐
โข Companies may be required to electronically notify shareholders about buyback offers within one working day of the public announcement.
โข The objective is to ensure faster and wider dissemination of information to investors.
โข This could improve transparency and help shareholders respond to buyback opportunities more efficiently.
๐๐. ๐ฆ๐๐๐ ๐๐ผ๐ฒ๐ ๐ก๐ผ๐ ๐ช๐ฎ๐ป๐ ๐๐๐๐ฏ๐ฎ๐ฐ๐ธ๐ ๐๐ผ ๐๐ฟ๐ฎ๐ด ๐๐ผ๐ฟ ๐ ๐ผ๐ป๐๐ต๐
โข SEBI has proposed a maximum timeline of 66 working days for buybacks.
โข The regulator believes prolonged buybacks may lose relevance in changing market conditions.
โข Companies may still need to deploy at least 40% of the earmarked amount in the first half of the offer period.
๐๐๐. ๐ง๐ต๐ฒ ๐ฆ๐ฒ๐ฝ๐ฎ๐ฟ๐ฎ๐๐ฒ ๐ง๐ฟ๐ฎ๐ฑ๐ถ๐ป๐ด ๐ช๐ถ๐ป๐ฑ๐ผ๐ ๐ ๐ฎ๐ ๐๐ผ
โข SEBI proposes removing the separate trading window for buybacks.
โข The companyโs identity as purchaser may also no longer appear on trading screens.
โข The move is aimed at reducing procedural complexity after tax-related changes under the Finance Act, 2026.
๐๐ฉ. ๐ฃ๐ฟ๐ผ๐บ๐ผ๐๐ฒ๐ฟ ๐๐ผ๐น๐ฑ๐ถ๐ป๐ด๐ ๐ช๐ถ๐น๐น ๐๐ฎ๐ฐ๐ฒ ๐ง๐ถ๐ด๐ต๐๐ฒ๐ฟ ๐ฆ๐ฐ๐ฟ๐๐๐ถ๐ป๐
โข Promoter holdings may be frozen during the buyback period.
โข The objective is to prevent trading by promoters and related entities during the buyback window.
โข Promoters may still participate through the tender offer route.
๐ฉ. ๐ ๐ถ๐ป๐ถ๐บ๐๐บ ๐ฃ๐๐ฏ๐น๐ถ๐ฐ ๐ฆ๐ต๐ฎ๐ฟ๐ฒ๐ต๐ผ๐น๐ฑ๐ถ๐ป๐ด (๐ ๐ฃ๐ฆ) ๐๐ฒ๐๐ ๐๐๐๐ฒ๐ป๐๐ถ๐ผ๐ป
โข Companies may not be allowed to launch buybacks if it risks breaching MPS norms.
โข SEBI wants to ensure that buybacks do not excessively reduce public float and market liquidity.
๐ฉ๐. ๐ง๐ต๐ฒ ๐๐ผ๐ผ๐น๐ถ๐ป๐ด-๐ข๐ณ๐ณ ๐ฃ๐ฒ๐ฟ๐ถ๐ผ๐ฑ ๐๐ฒ๐๐๐ฒ๐ฒ๐ป ๐ง๐๐ผ ๐๐๐ ๐๐ฎ๐ฐ๐ธ๐ ๐ ๐ฎ๐ ๐๐ต๐ฎ๐ป๐ด๐ฒ
โข SEBI proposes aligning the cooling-off period between two buybacks with the Companies Act, 2013.
โข This could remove overlapping compliance timelines and simplify the framework.
๐ฉ๐๐. ๐ ๐ฒ๐ฟ๐ฐ๐ต๐ฎ๐ป๐ ๐๐ฎ๐ป๐ธ๐ฒ๐ฟ๐ ๐ ๐ฎ๐ ๐ก๐ผ ๐๐ผ๐ป๐ด๐ฒ๐ฟ ๐๐ฒ ๐ ๐ฎ๐ป๐ฑ๐ฎ๐๐ผ๐ฟ๐
โข SEBI has proposed making merchant banker appointments optional for buybacks.
โข Certain procedural responsibilities may instead be handled internally or through compliance officers and auditors.
โข This could significantly reduce compliance costs, especially for smaller buybacks.
Overall, SEBI seems to be moving towards a more practical and execution-focused buyback framework simplifying processes while tightening governance where necessary.