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SEBI cuts share buyback timeline to 44 days


SEBI cuts share buyback timeline to 44 days
Market regulator Securities and Exchange Board of India (SEBI) has reduced the timeline for shares buyback with intention to achieve its disinvestment target of Rs 40, 000 crore. The timeline has been reduced to 33-44 days from 63-114 days.

“The timeline for various activities involved in the buyback process have been revised, which shall result in substantial reduction of time taken for completion of buyback,” the SEBI said.


The changes made will be a part of amendments made by the regulator in the SEBI (Buyback of Securities) Regulations, 1998. With effect from 3 January.

This fiscal the government has set its disinvestment target of Rs 40,000 crore, finding it difficult to cope with the target, till date it has managed to raise only Rs 1, 450 crore.

The government running short of time is busy introducing new paths, including raising funds through disinvestment. In buyback mode the government can raise money by selling its equity in the company to the PSU itself.

The cabinet approval has been taken by the Department of Disinvestment (DoD) to use the buyback mode. However, the government is unable to decide as the differences in the committee and PSUs unwillingness to part with cash.

As per the earlier norms, in case of buyback the company was required to accept the shares tendered by the shareholders in proportion to the shares tendered by the shareholder and not in proportion to the shares held. However, this has been modified, as reported by PTI.

SEBI has also made some changes in buyback regulations in report date and requirement of public notice and public announcement norms.
Sources from PTI

Read more about: sebi shares disinvestment psu
Story first published: Monday, January 16, 2012, 12:26 [IST]
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