Companies blaze new route to buyback, skip narrower one

Opt for tender route, which allows promoter participation, over the open-market option

India Inc is increasingly opting for the 'tender route' buyback instead of the traditional 'open market' route. Between 2006 and 2014, nearly 80 per cent of the buybacks were done through the 'open market' route. Since 2015, 95 per cent of the buybacks have been through the 'tender route'. Even the recent mega-buyback of Tata Consultancy Services (TCS) has been proposed to be done through the 'tender route'.

Change in regulatory and taxation framework has been the key factor behind the shift.

The sharp rise in tender buybacks have coincided with the government's decision to levy 10 per cent additional