Change in tax structure prompted India Inc to favour buybacks again in FY21

In 2020-21, Indian firms offered to buy back shares worth Rs 39,295 crore, or 97% more than Rs 19,972 cr proposed in the previous financial year

Share buybacks have made a strong comeback as tax considerations have once again made India Inc favour the route to reward their shareholders.

In 2020-21, India Inc offered to buy back shares worth Rs 39,295 crore (actual amount acquired stood at Rs 34,624 crore)—97 per cent more than Rs 19,972 crore (actual amount acquired stood at Rs 17,843 crore) proposed in the previous financial year.

Furthermore, the share of buybacks in the total shareholder reward kitty (dividend + buyback) rose to 21 per cent in FY21 from 8.3 per cent in the preceding financial year, an analysis of data provided