Tender Offer - Buyback

‘Tender offer’ means an offer by a company to buy-back its own shares or other specified securities through a letter of offer from the holders of the shares or other specified securities of the company.

A company may buy-back its shares or other specified securities by anyone of the following methods:

1. from the existing shares or other specified security-holders on a proportionate basis through the tender offer;
2. from the open market through—
   1. book-building process,
   2. stock exchange;
3. from odd-lot holders:

 Provided that no offer of buy-back for fifteen percent or more of the paid-up capital and free reserves of the company shall be made from the open market.

A company may buy-back its shares or other specified securities from its existing security-holders on a proportionate basis in accordance with the provisions of Chapter III of SEBI (Buy-back of Securities) Regulations, 2018:   Provided that fifteen percent of the number of securities which the company proposes to buy-back or number of securities entitled as per their shareholding, whichever is higher, shall be reserved for small shareholders.

Download the SEBI Regulations on Buy-Back of Securities (.pdf).