Published Paper Details:

The Indian stock market has witnessed a significant rise in share buyback activities in recent years, as companies strategically utilize surplus cash to optimize capital structure, enhance shareholder returns, and signal confidence in their financial stability. While buybacks are often associated with positive outcomes, their impact on share prices and market sentiment remains a topic of extensive debate and analysis.This study investigates the implications of share buybacks on shareholder wealth and market dynamics in India, focusing on data from 154 companies that conducted buybacks over the past four years. A refined sample of 76 companies, selected based on their use of tender offers and market capitalization exceeding INR1,000 crore, serves as the basis for detailed analysis. Data was sourced from credible platforms such as BSE, NSE, Chittorgarh, and Investing.com, encompassing critical details like buyback size, record dates, and acceptance ratios.Findings indicate that buybacks often result in favourable market reactions, with share prices frequently surging within three months to a year following the announcement. This is largely attributed to perceptions of undervaluation and confidence in future profitability. Calculations of actual and assumed acceptance ratios reveal that the actual acceptance is often higher, enabling participating shareholders to realize substantial gains. Additionally, residual value analysis provides a framework for investors to optimize selling prices for shares not accepted during buybacks, ensuring profitable outcomes.While buybacks are widely regarded as a signal of positive future prospects, they can also serve as a defensive mechanism during periods of declining stock valuations to stabilize market perception and protect the company's capital base. The study underscores the importance of analyzing factors such as stock price trends and earnings per share to discern the motives behind buybacks, offering valuable insights to investors, analysts, and corporate decision-makers.In conclusion, share buybacks stand as a powerful financial tool, driving shareholder value, enhancing market confidence, and shaping perceptions of corporate governance. However, their broader implications depend on market conditions, company strategies, and investor interpretations, emphasizing the need for nuanced decision-making.