Buy back Shares

Just out of curiosity, why would a company buy back their own stock??

Hey @TanyaChopra

There are multiple objectives as to why a company would buy back their shares.

  • It reduces the number of shareholders of the company and enhances the EPS (Earning per share).
  • Helps improve key financial ratios like return on net worth, return on assets etc. over a period of time.
  • To the investors it shows the confidence the management has in the business.

We have an article specifically about Buyback Shares. You can read more about it here.

Section 115QA is applicable to listed as well as unlisted companies. Kindly correct your blog

Hi @Peri_Ram_Prasad

Provisions of section 115QA were initially applicable only to unlisted companies. However, vide the Finance (No. 2) Act, 2019, the provisions of section 115QA are amended and the same is made applicable to the listed companies also.

However, it excludes listed companies whose public announcement has been made before 5th July 2019 and was as per the provisions of SEBI Regulations. Attaching the screenshot of the Section from the Income Tax Act .