{"id":14838,"date":"2026-06-18T06:09:19","date_gmt":"2026-06-18T06:09:19","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/?p=14838"},"modified":"2026-06-09T06:16:43","modified_gmt":"2026-06-09T06:16:43","slug":"stock-buybacks-india","status":"publish","type":"post","link":"https:\/\/lemonn.co.in\/blog\/finance\/stock-buybacks-india\/","title":{"rendered":"Stock Buybacks in India: How They Create Shareholder Value"},"content":{"rendered":"
\"Stock<\/figure>\n\n\n

What is a Share Buyback?<\/strong><\/h3>\n\n\n\n

A share buyback (repurchase) occurs when a company uses its cash to purchase its own shares from the market. The purchased shares are extinguished (cancelled), reducing total shares outstanding. This increases Earnings Per Share (EPS) and Book Value Per Share \u2014 benefiting remaining shareholders who didn’t sell.<\/p>\n\n\n\n

Two Types of Buybacks in India<\/strong><\/h3>\n\n\n\n
Type<\/strong><\/th>How It Works<\/strong><\/th>SEBI Rules<\/strong><\/th><\/tr><\/thead>
Tender Offer (Fixed Price)<\/td>Company offers to buy shares at a fixed premium price from shareholders. You choose to tender or not.<\/td>Most common; SEBI specifies maximum premium over market price<\/td><\/tr>
Open Market Buyback<\/td>Company buys shares on NSE\/BSE like any market participant over several months<\/td>Less common since SEBI tightened rules; maximum 25% of paid-up capital + reserves<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Tax Treatment of Buybacks<\/strong><\/h3>\n\n\n\n

Pre-October 2024 Rule<\/strong><\/h3>\n\n\n\n

Previously, buybacks were subject to Buyback Tax (BBT) paid by the company at 20% on distributed income \u2014 shareholders received tax-free proceeds. This made buybacks tax-efficient for investors.<\/p>\n\n\n\n

Post-October 2024 Rule<\/strong><\/h3>\n\n\n\n

From October 2024, buyback proceeds are taxable in the hands of shareholders (not the company). Gains from buyback are treated as capital gains \u2014 STCG at 20% if held < 12 months, LTCG at 12.5% if held > 12 months. This brought buyback tax treatment closer to dividend tax.<\/p>\n\n\n\n

Why Indian IT Companies Love Buybacks: TCS, Infosys, Wipro<\/strong><\/h3>\n\n\n\n

Indian IT sector has been the most prolific buyback executor. TCS has conducted annual buybacks since 2017 totalling over \u20b91,00,000 crore. Infosys runs annual buybacks. The rationale: excess cash (no major capex requirements), high promoter shareholding (get cash without selling shares), and EPS accretion for remaining shareholders.<\/p>\n\n\n\n

Company<\/strong><\/th>Total Buyback (Approx)<\/strong><\/th>Frequency<\/strong><\/th>Impact on EPS<\/strong><\/th><\/tr><\/thead>
TCS<\/td>\u20b91,00,000+ Cr (cumulative)<\/td>Annual (2017\u2013present)<\/td>EPS ~5% higher per buyback<\/td><\/tr>
Infosys<\/td>\u20b950,000+ Cr (cumulative)<\/td>Annual\/periodic<\/td>Similar EPS accretion<\/td><\/tr>
Wipro<\/td>\u20b940,000+ Cr (cumulative)<\/td>Annual<\/td>Moderate EPS accretion<\/td><\/tr><\/tbody><\/table><\/figure>\n","protected":false},"excerpt":{"rendered":"

What is a Share Buyback? A share buyback (repurchase) occurs when a company uses its cash to purchase its own shares from the market. The purchased shares are extinguished (cancelled), reducing total shares outstanding. This increases Earnings Per Share (EPS) and Book Value Per Share \u2014 benefiting remaining shareholders who didn’t sell. Two Types of […]<\/p>\n","protected":false},"author":15,"featured_media":14839,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","_ayudawp_aiss_exclude":false,"_ayudawp_aiss_summary":"Previously, buybacks were subject to Buyback Tax (BBT) paid by the company at 20% on distributed income \u2014 shareholders received tax-free proceeds. Why Indian IT Companies Love Buybacks: TCS, Infosys, Wipro. TCS has conducted annual buybacks since 2017 totalling over \u20b91,00,000 crore.","_ayudawp_aiss_summary_provider":"extractive","_ayudawp_aiss_summary_hash":"93ac73b90b3581fbc18ae91a66a67e7f615aefba","footnotes":""},"categories":[1],"tags":[],"class_list":["post-14838","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"blocksy_meta":[],"uagb_featured_image_src":{"full":["https:\/\/lemonn.co.in\/blog\/wp-content\/uploads\/2026\/06\/Stock-Buybacks-in-India-How-They-Create-Shareholder-Value.png",768,512,false],"thumbnail":["https:\/\/lemonn.co.in\/blog\/wp-content\/uploads\/2026\/06\/Stock-Buybacks-in-India-How-They-Create-Shareholder-Value-150x150.png",150,150,true],"medium":["https:\/\/lemonn.co.in\/blog\/wp-content\/uploads\/2026\/06\/Stock-Buybacks-in-India-How-They-Create-Shareholder-Value-300x200.png",300,200,true],"medium_large":["https:\/\/lemonn.co.in\/blog\/wp-content\/uploads\/2026\/06\/Stock-Buybacks-in-India-How-They-Create-Shareholder-Value.png",768,512,false],"large":["https:\/\/lemonn.co.in\/blog\/wp-content\/uploads\/2026\/06\/Stock-Buybacks-in-India-How-They-Create-Shareholder-Value.png",768,512,false],"1536x1536":["https:\/\/lemonn.co.in\/blog\/wp-content\/uploads\/2026\/06\/Stock-Buybacks-in-India-How-They-Create-Shareholder-Value.png",768,512,false],"2048x2048":["https:\/\/lemonn.co.in\/blog\/wp-content\/uploads\/2026\/06\/Stock-Buybacks-in-India-How-They-Create-Shareholder-Value.png",768,512,false],"web-stories-poster-portrait":["https:\/\/lemonn.co.in\/blog\/wp-content\/uploads\/2026\/06\/Stock-Buybacks-in-India-How-They-Create-Shareholder-Value-640x512.png",640,512,true],"web-stories-publisher-logo":["https:\/\/lemonn.co.in\/blog\/wp-content\/uploads\/2026\/06\/Stock-Buybacks-in-India-How-They-Create-Shareholder-Value-96x96.png",96,96,true],"web-stories-thumbnail":["https:\/\/lemonn.co.in\/blog\/wp-content\/uploads\/2026\/06\/Stock-Buybacks-in-India-How-They-Create-Shareholder-Value-150x100.png",150,100,true]},"uagb_author_info":{"display_name":"Team Lemonn","author_link":"https:\/\/lemonn.co.in\/blog\/author\/yudh\/"},"uagb_comment_info":0,"uagb_excerpt":"What is a Share Buyback? A share buyback (repurchase) occurs when a company uses its cash to purchase its own shares from the market. The purchased shares are extinguished (cancelled), reducing total shares outstanding. This increases Earnings Per Share (EPS) and Book Value Per Share \u2014 benefiting remaining shareholders who didn’t sell. Two Types of…","_links":{"self":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/posts\/14838","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/comments?post=14838"}],"version-history":[{"count":2,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/posts\/14838\/revisions"}],"predecessor-version":[{"id":14843,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/posts\/14838\/revisions\/14843"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media\/14839"}],"wp:attachment":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media?parent=14838"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/categories?post=14838"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/tags?post=14838"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}