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Share buybacks might actually end up harming IT companies' competitiveness

The strategy of returning cash to shareholders through stock purchases could hinder their digital expansion plans

Share buybacks might actually end up harming IT companies' competitiveness
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Debasis Mohapatra Bengaluru
Share buybacks have become all too frequent among Indian IT firms over the past year as piling cash reserves and a lack of alternative opportunities for investment have prompted these tech giants to return surplus cash to investors. 

Last year, 11 IT firms bought back nearly Rs 453 billion through such programmes. In a way, the domestic IT firms have joined a growing global trend, where large firms enrich their shareholders with such programmes on a regular basis. Analysts are of the opinion that as share buyback is one of the most tax efficient methods of returning cash to investors

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