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Sebi reserves 15% quota for small shareholders


Sebi reserves 15% quota for small shareholders
The Securities and Exchange Board of India (SEBI) on Tuesday has modified regulation for small shareholders, market regulator has introduced to reserve 15% quota for small shareholders in share buyback.

Small shareholder ‟ means a shareholder of a listed company, who holds shares or other specified securities whose market value, on the basis of closing price of shares or other specified securities, on the recognised stock exchange in which highest trading volume in respect of such security, as on record date is not more than two lakh rupee;”


Buyback is the process of reducing a company's shares available in the stock market. Consider buyback as a company investing in itself, or using its cash to buy its own shares.

These regulations shall be called the. Securities and Exchange Board of India (Buy-Back of Securities) (Amendment) Regulations, 2012. They shall come into force on the date of their publication in the Official Gazette, in the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 1998.

The share buyback tender offer route can be completed within 41 days of the board approval. As per the guidelines, a company would have to publish advertisement in newspapers within 2 days after securing board approval.

The market regulator also said that the shares proposed to be bought back would be divided into two categories: reserved category for small shareholders; and the general category for other shareholders and the entitlement of a shareholder in each category would be calculated accordingly.

However, the buyback offer should open not later than five working days from the day the letter of offer is dispatched. The offer for the buyback shall remain open for a period of ten working days.


A company intending to buy back its shares, would need to file a copy of the resolution, with the board and the stock exchanges within two working days of the date of the passing of the resolution.

Read more about: sebi shares buyback capital market
Story first published: Wednesday, February 8, 2012, 12:53 [IST]
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