Daijiworld Media Network – Mumbai
Mumbai, May 9: Securities and Exchange Board of India (Sebi) has proposed additional measures to its earlier plan to reintroduce open market share buybacks through stock exchanges following consultations with the Primary Market Advisory Committee (PMAC).
The market regulator had first floated the proposal in April. On Friday, Sebi issued fresh recommendations after internal deliberations on suggestions made by the committee.
Under the revised proposal, Sebi has suggested allowing companies to undertake open market buybacks through stock exchanges with a maximum completion timeline of 66 working days from the date of opening of the offer.
The regulator has also proposed retaining the requirement that at least 40 per cent of the buyback size must be utilised within the first half of the offer period.
While the PMAC had recommended a six-month completion timeline and a 50 per cent utilisation threshold, Sebi said amendments under the Finance Act, 2026 concerning the permissible gap between two buyback offers require a more balanced approach.
The regulator noted that a six-month buyback window may reduce the relevance of such offers amid rapidly changing market conditions and could also become difficult for shareholders to track.
Sebi has further proposed freezing shares and other specified securities held by promoters and their associates at the ISIN level during the buyback period as an additional safeguard.
Currently, promoters and their associates are barred from dealing in company shares, including inter-promoter transfers, from the date of the board decision until closure of the buyback.
The regulator has also suggested removing the requirement for a separate trading window for buyback transactions and allowing such trades through the normal market mechanism.
Another proposal seeks to eliminate the requirement to display the company’s identity as the purchaser on trading screens.
Sebi has additionally proposed introducing explicit provisions to ensure that buybacks do not result in violation of minimum public shareholding norms.
The regulator also plans to align the interval between two buyback offers with the provisions of the Companies Act 2013.
Further, Sebi has proposed making the appointment of merchant bankers optional. Responsibilities currently managed by merchant bankers may instead be reassigned to companies, stock exchanges and secretarial auditors.
The regulator has also suggested making it mandatory for companies to electronically inform shareholders about buyback offers within one working day of the public announcement.
At present, companies are required to make a public announcement within two working days from the date of postal ballot results for special resolutions