SEBI tightens buyback, preferential allotment norms
The Securities & Exchange Board of India (SEBI) has said that the mandatory minimum buyback
is now 50 per cent of the offer size, against the earlier 25 per cent. Companies have to forfeit up to 2.5 per cent of the money earmarked for the buyback if they fail to achieve the 50 per cent mark.
The maximum buyback period has been reduced from 12 months to six. Companies can neither raise further capital nor make another buyback offer for a year. Shares bought back every month have to be extinguished by the 15th of the next month. The last installment should, however, be completed within seven days of completion of the offer.
is now 50 per cent of the offer size, against the earlier 25 per cent. Companies have to forfeit up to 2.5 per cent of the money earmarked for the buyback if they fail to achieve the 50 per cent mark.
The maximum buyback period has been reduced from 12 months to six. Companies can neither raise further capital nor make another buyback offer for a year. Shares bought back every month have to be extinguished by the 15th of the next month. The last installment should, however, be completed within seven days of completion of the offer.
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