The Securities and Exchange Board of India (Sebi) is likely to discuss share buyback at its next board meeting on November 10. The regulator is currently finalising the composition of the committee that is to recommend the guidelines for buyback.
Sebi chairman D R Mehta said the regulator would seek to finalise the committee at the earliest. Besides Sebi executive directors Vijay Ranjan (possibly as convenor) and Dharmishta Raval, the committee would have representatives from Ficci, Assocham and investor bodies.
"If the committee composition is done in the coming days we would take the buyback issue to the board," Mehta said. "Considering the background and the knowledge available on the subject, it will not take too much time to finalise these guidelines," Mehta said yesterday.
Buyback of shares was announced by Prime Minister A B Vajpayee last week as part of the economic package to boost capital markets.
According to marketmen, there are more than 5,000 companies listed on stock exchanges of which several are undervalued. Allowing companies to buy back shares would result in the inflow of funds into the capital markets and aid liquidity, they added.
Sebi will also meet today to expand the list of scrips for compulsory demat. According to Sebi sources, the list of scrips for compulsory demat would be increased by another 25-30, while the list for institutional investors in demat trading would be shortly increased from 235 to over 300.
Sebi has also announced the list of 10 scrips for compulsory demat for all investors from January 4, 1999. Last week, the regulator announced that investors with a net delivery obligation of 5,000 and more shares in the 30 BSE sensex scrips would have to settle all trades in demat form from January 4, 1999.
