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Informist, Friday, May 8, 2026

 

MUMBAI – The Securities and Exchange Board of India has proposed to cut the interval between two buybacks by companies to six months from one year. This will align the rule with that laid out in the Companies Act, 2013, the regulator said in a consultation paper.

 

Apart from this, SEBI proposed several other changes related to timeline, minimum public shareholding, AND restrictions on promoters related to buyback offers. SEBI put out the latest consultation paper after its Primary Market Advisory Committee suggested some additional changes to the regulator's plans of allowing open market buyback of shares.

 

SEBI proposed that a buyback offer be allowed to remain open for 66 days. However, the committee had recommened buyback should be allowed to open for six months. "While PMAC has recommended a maximum duration of six months for completion of buy-back offers, it is observed that such a timeline seems relatively long from the point of timely implementation of buy-back," SEBI said. "...it is considered appropriate to retain the existing requirement relating to utilization of minimum 'forty percent' of the amount earmarked for buy-back within the initial half of the specified duration."

 

SEBI has also suggested that shareholders be made aware about the buyback offer through electronic mode as well. SEBI plans to put more restrictions on promoter and promoter group entities during the time buyback offers are open. Currently, promoters are not allowed to deal in the shares after the buyback announcement. The committee has proposed promoters' shares in the company which is carrying out buybacks be frozen till the buyback is completed.

 

SEBI is also looking do away with the requirement of having a merchant banker for the buyback offer. The regulator said that a merchant banker's responsibility for buybacks is procedural in nature and this can be done by the company or stock exchanges.  End

 

Reported by Anshul Choudhary

Edited by Avishek Dutta

 

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