Tighter rules add spark to India Inc buybacks

Success rate of buybacks improves to nearly 98% after Sebi enacts new rules

Between 2002 and 2013, companies acquired less than half the proposed share buyback amount. However, after market regulator Securities and Exchange Board of India (Sebi), tightened the buyback norms to avoid the misuse of the instrument, the success rate of buybacks has improved to nearly 98 per cent.

"Earlier, most companies announced buybacks just to shore up stock prices but never actually bought back shares. Since Sebi has tightened the regulations, the misuse has been curbed. Only serious players wanting to reward shareholders are now making announcements," said a Sebi official.

In August 2013, the market regulator made some key