1. BUYBACK OF SHARES THANE SMF CENTRE of WIRC THE INSTITUTE OF COST ACCOUNTANTS OF INDIA SATURDAY, APRIL 14, 2018

2. AGENDA
A discussion on some of the Indian regulatory provisions Buybacks by listed companies Buybacks by private companies and unlisted public companies Recent buybacks in India A few case studies Some of the questions that arose in a few transactions Challenges faced by a few companies Questions and answer session

3. A DISCUSSION ON SOME OF THE INDIAN REGULATORY PROVISIONS

4. A DISCUSSION ON SOME OF THE INDIAN REGULATORY PROVISIONS
Companies Act, 2013,
Companies (Share Capital and Debenture) Rules, 2014
Postal Ballot Rules – Section 110 of the Companies Act, 2013 and Rule 22(16)(g) of the Companies (Management and Administration) Rules 2014
Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998
Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011
Securities Contracts (Regulation) Rules, 1957
Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015

5. Companies Act, 2013

6. COMPANIES ACT, 2013 Sections 68, 69 & 70 Section 68(1)
Sources of funding for buyback
Free reserves
Securities premium account
Proceeds of the issue of any shares or other specified securities
Proviso to Section 68 (1) – Buyback not to be financed from the proceeds of the same kind of shares / specified securities

7. COMPANIES ACT, 2013 Section 68 (2)
Buyback should be authorised by the articles of association of the company
Board approval route – board resolution
Where the buyback is 10% or less of the paid-up equity capital and free reserves of the company
Shareholders’ approval route – special resolution through postal ballot
Where the buyback is 25% or less of the aggregate of the paid-up capital and free reserves of the company.
Proviso to Section 68(2) - In case of buyback of equity shares in any financial year – limit of 25% of total paid-up equity capital in a financial year.

8. COMPANIES ACT, 2013 Section 68(2)
Post buyback debt-equity ratio not to exceed 2 : 1
All the shares or other specified securities sought to be bought back are fully paid-up.
The buyback of shares or other specified securities listed on any stock exchange to be in accordance with regulations made by SEBI.
Buyback of shares or other specified securities other than those listed on any recognised stock exchange to be in accordance with such rules as may be prescribed.
Proviso to Section 68(2) – Time gap of a one year period after the closure of the preceding offer of buyback before another buyback offer is made.

9. COMPANIES ACT, 2013 Section 68(3)
Explanatory statement to the notice to shareholders for the special resolution to contain the following disclosures:-
A full and complete disclosure of all facts
The necessity for the buyback
The class of shares or specified securities intended to be purchased under the buyback
The amount to be invested under the buyback
The time limit for completion of the buyback

10. COMPANIES ACT, 2013
Section 68(4) – Buyback to be completed within one year from the date of passing of the special resolution
Section 68(5) – buyback maybe
From the existing shareholders or security holders on a proportionate basis
From the open market
By purchasing the securities issued to employees pursuant to an ESOP scheme or sweat equity shares
Section 68(6) – declaration of solvency, along with an affidavit to be filed with SEBI & RoC before making such buyback.

11. COMPANIES ACT, 2013 Section 68(7) – extinguishment of shares
Section 68(8) – after completion of buyback no further issue of same kind of shares or other specified securities for a period of six months except by way of bonus issue or in discharge of subsisting obligations.
Sections 68(9) and 68(10) – maintenance of a register and filing of a return of buyback after completion of buyback.

12. COMPANIES ACT, 2013
Section 69(1) – creation of a capital redemption reserve
Restrictions on buyback – no buyback in following cases:-
Section 70(1) –
Through any subsidiary
Through any investment company
Default in repayment of deposits or interest thereon,
Default in redemption of debentures or preference shares or payment of dividend to any shareholder,
Default in repayment of any term loan or interest payable thereon to any financial institution or banking company
– if default is remedied and a period of three years has lapsed after such default ceased to subsist – no restrictions on buyback.

13. COMPANIES ACT, 2013
Restrictions on buyback – no buyback in following cases :-
Section 70(2) – non-compliance with following sections :-
92 – provisions relating to annual returns
123 – declaration of dividend – out of profits after providing for depreciation
127 – distribution of dividend – within 30 days of declaration
129 – financial statements to comply with accounting standards notified under Section 133 and in the form or forms specified in Schedule III

14. SECURITIES AND EXCHANGE BOARD OF INDIA (BUYBACK OF SECURITIES) REGULATIONS, 1998

15. SEBI BUYBACK REGULATIONS
These regulations to apply to buyback of shares or other specified securities listed on a stock exchange.
A company listed on a stock exchange shall not buyback shares or other specified securities so as to delist its shares or other specified securities from the stock exchange.
Funds borrowed from banks and financial institutions will not be used for the buyback.

16. SEBI BUYBACK REGULATIONS
A company may buyback its shares or other specified securities by any one of the following methods:-
From the existing security holders on a proportionate basis through tender offer
From the open market through – [ no offer of buyback for 15% or more of the paid-up capital and free reserves of the company shall be made from the open market ]
Book building process
Stock exchange
From odd-lot holders
A company shall not make any offer of buyback within a period of one year reckoned from the date of closure of the preceding offer of buyback.

17. SEBI BUYBACK REGULATIONS
Explanatory statement to the notice for special resolution to contain disclosures specified in Schedule II, Part A. In addition, the following disclosures as well :-
The maximum price at which the buyback of shares or other specified securities shall be made and whether the Board of Directors is authorized to decide the specific price subsequently.
If the promoter intends to offer their shares or specified securities
The quantum of shares or specified securities proposed to be tendered and the details of their transactions and their holdings for the last six months prior to the passing of the resolution including information on number of shares or other specified securities acquired, the price and the date of acquisition.
A copy of the resolution passed, to be filed with SEBI and stock exchanges within 7 days of passing of the resolution.
In case of a buyback through the Board of Directors’ approval route, a copy of the resolution passed to be filed with SEBI and stock exchanges within 2 working days of the days of the date of passing of the resolution.

18. SEBI BUYBACK REGULATIONS – BUYBACK THROUGH TENDER ROUTE
A company may buyback its shares or other specified securities from its existing shareholders on a proportionate basis
15% of the number of securities which the company proposes to buyback or the number of securities entitled as per their shareholding, whichever is higher, shall be reserved for small shareholders
A public announcement (“PA”) containing disclosures as specified in Schedule II, Part A, should be released within 2 working days from the date of resolution – [shareholders’ special resolution / board of directors’ resolution]
The PA should be released in one English national daily, one Hindi national daily and a Regional Language daily, all with wide circulation.

19. SEBI BUYBACK REGULATIONS – BUYBACK THROUGH TENDER ROUTE
File a draft letter of offer with SEBI along with fees and declaration of solvency within 5 working days of the PA
A record date to be announced for the purpose of determining the entitlement and names of security holders who are eligible to participate in the buyback offer.
The letter of offer along with the tender form to be despatched to the security holders who are eligible to participate in the proposed buyback offer not later than 5 working days from the receipt of communication of comments from SEBI.
The date of opening of the offer shall not be later than 5 working days from the date of despatch of the letter of offer.
The company to facilitate tendering of shares by the shareholders and settlement of the same through the stock exchange mechanism.

20. SEBI BUYBACK REGULATIONS – BUYBACK THROUGH TENDER ROUTE
The buyback offer to remain open for 10 working days
Company to accept shares or other specified securities from the security holders on the basis of their entitlements as on record date
The shares proposed to be bought back shall be divided into two categories
Reserved category for small shareholders
General category for other shareholders
And the entitlement of a shareholder in each category shall be calculated accordingly.

21. SEBI BUYBACK REGULATIONS – BUYBACK THROUGH TENDER ROUTE
Order of acceptance
On the basis of entitlement
Any shares left to be accepted on a proportionate basis i.e. in proportion to shares tendered over and above their entitlement in that category
Any shares left after the above two steps, from security holders who have tendered over and above their entitlement in the other category

22. SEBI BUYBACK REGULATIONS- BUYBACK THROUGH TENDER ROUTE
Escrow account
If consideration does not exceed Rs.100 crores – 25% of the consideration
If consideration exceeds Rs.100 crores – 25% upto Rs.100 crores and 10% thereafter
Cash deposit – empowering the Merchant Banker to issue instructions to the escrow banker
Bank guarantee in favour of the Merchant Banker – valid until 30 days after the closure of the offer
Deposit of acceptable securities with appropriate margin with the Merchant Banker
A combination of the above three
Where the escrow consists of a bank guarantee or deposit of securities, the company shall also deposit 1% of the total consideration in cash with the escrow bank

23. SEBI BUYBACK REGULATIONS – BUYBACK THROUGH TENDER ROUTE
The company shall immediately after the closure of the offer, open a special account and deposit such sum that together with 90% of the amount in the escrow account would make up the total consideration payable.
The company to complete the verification and make payment consideration within 7 working days of the closure of the offer – this is now completed much earlier in view of the new mechanism becoming applicable.
The company shall extinguish the shares bought back within 15 days of the date of acceptance of the shares – this too is now completed much earlier.

24. SEBI BUYBACK REGULATIONS – BUYBACK THROUGH OPEN MARKET
The company to ensure that at least 50% of the amount earmarked for buyback is utilized for buying back shares or other specified securities
The special resolution / board resolution shall specify the maximum price at which the buyback shall be made
The buyback shall not be made from the promoters or persons in control of the company.
A PA shall be made within 7 working days from the date of passing of the resolution and shall contain disclosures as per Part B of Schedule II.
The company shall submit the information regarding the shares or other specified securities bought back on a daily basis to the stock exchanges.
The buyback shall open not later than 7 working days from the date of the PA and shall close within 6 months from the date of opening of the offer.
The company shall ensure that all the shares bought back are extinguished within 7 days of the last date of completion of buyback.

25. SEBI BUYBACK REGULATIONS – BUYBACK THROUGH OPEN MARKET
Escrow account
The company shall before opening of the offer open an escrow account and deposit 25% of the amount earmarked for buyback
Where the escrow comprises of a bank guarantee, the company shall deposit in cash a sum of at least 2.5% of the amount earmarked for buyback.

26. SEBI BUYBACK REGULATIONS – BUYBACK THROUGH BOOK BUILDING METHOD
The shareholders’ resolution / board resolution shall specify the maximum price at which the buyback shall be made.
Amount to the deposited in the escrow account shall be based on the maximum price.
The PA shall be made at least 7 days prior to the commencement of the buyback
The offer for buyback shall remain open for a period not less than 15 days and not exceeding 30 days.
The merchant banker and the company shall determine the buyback price based on acceptances received.
The final buyback price, which shall be the highest price accepted shall be paid to all holders whose shares / specified securities have been accepted.
Other provisions relating to verification, payment of consideration and extinguishment remain the same.

27. SEBI BUYBACK REGULATIONS – OBLIGATIONS OF THE COMPANY
The letter of offer, public announcement or any other related document / material shall contain true and factual material information.
No issue of shares / other specified securities including by way of bonus till the date of closure of the offer.
Consideration to be paid only by way of cash.
Not to withdraw the buyback offer after the draft letter of offer is filed with SEBI or PA is made.
The promoter not to deal in the shares / other specified securities from the date of passing of the resolution till the closing of the offer.

28. SEBI BUYBACK REGULATIONS – OBLIGATIONS OF THE COMPANY…. 2
No further capital to be raised for a period of one year from the closure of the offer, except in discharge of its subsisting obligations.
No PA of buyback to be made .during the pendency of any scheme of amalgamation or compromise or arrangement.
Details of extinguishment to be furnished to stock exchanges within 7 days of extinguishment.
Not to buyback locked-in / non-transferable shares / other specified securities.
Issue a PA within 2 days of completion of buyback giving details of number of shares bought back, price, amount invested, details of security holders from whom shares exceeding 1% of total shares were bought back and pre & post buyback capital structure and shareholding pattern.

29. BUYBACK OF SHARES AND OPEN OFFER ARE TOTALLY DIFFERENT FROM EACH OTHER.

30. SECURITIES AND EXCHANGE BOARD OF INDIA (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS, 2011

31. SECURITIES AND EXCHANGE BOARD OF INDIA (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS, 2011
Regulation 3(1) - No acquirer shall acquire shares or voting rights in a target company which taken together with shares or voting rights, if any, held by him and by persons acting in concert with him in such target company, entitle them to exercise 25% or more of the voting rights in such target company unless the acquirer makes a public announcement of an open offer for acquiring shares of such target company.
Regulation 3(2) – any acquirer who together with the persons acting in concert with him, has acquired and holds shares or voting rights in a target company entitling them to exercise 25% or more of the voting rights in the target company but less than the maximum permissible non-public shareholding, shall acquire within any financial year additional shares or voting rights in such target company entitling them to exercise more than 5% of the voting rights unless the acquirer makes a public announcement of an open offer for acquiring shares of such target company.

32. SECURITIES AND EXCHANGE BOARD OF INDIA (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS, 2011
Exemption from making an open offer in case of a buyback subject to certain conditions – Regulation 10(4)(c)
Increase in voting rights in a target company of any shareholder pursuant to a buyback shall be exempt from making an open offer provided that
Such shareholder has not voted in favour of the resolution authorising the buyback of securities under Section 68 of the Companies Act, 2013
Where a resolution of shareholders is not required for the buyback, such shareholder, in his capacity as a director or any other interested director has not voted in favour of the resolution of the Board of Directors of the target company authorising the buyback of securities under Section 68 of the Companies Act, 2013.
The increase in shareholding does not result in an acquisition of control by such shareholder over the target company.
Where the aforesaid conditions are not met, in the event such shareholder reduces his shareholding such that his voting rights fall below the level at which the obligation to make an open offer would be attracted.

33. SECURITIES CONTRACTS (REGULATION) RULES, 1957

34. SECURITIES CONTRACTS (REGULATION) RULES, 1957
In terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, all listed companies need to ensure that the public shareholding is at least 25% of the issued capital.
While considering a buyback of shares, every company should take into account the likely consequences of a buyback on the shareholding pattern of the company.

35. SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015

36. SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015
Regulation 29 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR”) - every listed company shall intimate the stock exchanges where the shares are listed, at least 2 working days in advance (excluding the date of intimation and the date of the Board Meeting) of the Board Meeting where the proposal for buyback of shares is due to be considered.
Clause (A)(4)(c) of Schedule III of the LODR - every company shall disclose the outcome to the exchanges within 30 minutes of the closure of the meeting of the Board of Directors held to consider the buyback of shares.
Regulation 42 of the LODR - every company shall give notice in advance of at least 7 working days (excluding the date of intimation and the record date) to stock exchanges of record date specifying the purpose of the record date. The company needs to ensure the time gap of at least 30 days between two record dates.

37. WHY ARE SHARES BOUGHT BACK?

38. WHY ARE SHARES BOUGHT BACK?
Some of the reasons are :-
The company has surplus cash which it is unable to deploy in business to generate adequate returns to shareholders. Such surplus cash is returned to shareholders through the buyback of shares.
The prevailing price of the shares of the company on the stock exchanges does not reflect the true value of the company.

39. BUYBACKS BY LISTED COMPANIES

40. BUYBACK BY LISTED COMPANIES -INDICATIVE TIMELINES FOR BUYBACK THROUGH TENDER METHOD – BOARD APPROVAL ROUTE
Activity
Day
Advance notice to exchange of the Board Meeting for buyback proposal T
Board Meeting for approving buyback
T + 6
Passing of Special Resolution by shareholders through Postal Ballot ^
T + 47
Announce Record Date
T + 48
Public Announcement
T + 49
Filing of Draft Letter of Offer with SEBI
T + 57
Record Date
T + 61
Receipt of SEBI observations
T + 68
Completion of despatch of Letter of Offer to shareholders
T + 75
Offer Opening
T + 83
Offer Closing
T + 97
Settlement Date
T + 99
Extinguishment of Shares
T + 101
Post buyback Public Announcement T
^ Shareholders’ resolution through postal ballot will be required for amending the Articles of Association, if necessary.

41. BUYBACK BY LISTED COMPANIES -INDICATIVE TIMELINES FOR BUYBACK THROUGH TENDER METHOD –SHAREHOLDERS’ APPROVAL ROUTE
Activity
Day
Advance notice to exchange of the Board Meeting for buyback proposal T
Board Meeting for approving buyback
T + 6
Passing of Special Resolution by shareholders through Postal Ballot
T + 47
Announce Record Date
T + 48
Public Announcement
T + 49
Filing of Draft Letter of Offer with SEBI
T + 57
Record Date
T + 61
Receipt of SEBI observations
T + 68
Completion of despatch of Letter of Offer to shareholders
T + 75
Offer Opening
T + 83
Offer Closing
T + 97
Settlement Date
T + 99
Extinguishment of Shares
T + 101
Post buyback Public Announcement T

42. BUYBACK BY LISTED COMPANIES -INDICATIVE TIMELINES FOR BUYBACK THROUGH OPEN MARKET METHOD – BOARD APPROVAL ROUTE
Activity
Day
Advance notice to exchange of the Board Meeting for buyback proposal T
Board Meeting for approving buyback
T + 6
Public Announcement
T + 15
Offer Opens
T + 24
Offer Closes
T + 204
Post buyback Public Announcement
T + 206
Extinguishment of shares
continuous
Note :- In case the Articles of Association need to be amended, Shareholders’ resolution through postal ballot will be required and thereafter the activities stated herein will commence.

43. BUYBACK BY LISTED COMPANIES -INDICATIVE TIMELINES FOR BUYBACK THROUGH BOOK BUILDING METHOD
Activity
Day
Advance notice to exchange of the Board Meeting for buyback proposal T
Board Meeting for approving buyback
T + 6
Public Announcement
T + 15
Offer Opens
T + 24
Offer Closes
T + 54
Payment of consideration
T + 56
Extinguishment of shares
T + 58
Post buyback Public Announcement
T + 60
Note :- In case the Articles of Association need to be amended, Shareholders’ resolution through postal ballot will be required and thereafter the activities stated herein will commence.

44. BUYBACK BY LISTED COMPANIES -INDICATIVE HEADS OF EXPENSES
S. No.
Nature of Expenditure 1.
Merchant Banker’s Fees 2.
SEBI Fees 3.
Legal Counsel’s Fees (Domestic & International) 4.
Stock Exchange Fees for providing the buyback platform 5.
Advertisement 6.
Registrar’s Fees 7.
Fees to the Depositories 8.
Printing & Postage 9.
Escrow Banker’s Fees
10.
Brokerage
11.
Fees to RoC
12.
Fees to Statutory Auditors
Note :- Expenses which may comprise small amounts have not been listed here.

45. FACTORS TO BE CONSIDERED FOR ARRIVING AT THE BUY BACK PRICE
Some of the important factors to be taken into consideration before deciding the buyback price
Maximum number of shares that can be bought back in a financial year
Maximum amount that can be utilised for the buyback
Post buy-back debt equity ratio
Cash available
Prevailing market price
Historical price data
Impact of the buyback on the various ratios

46. BUYBACKS BY PRIVATE COMPANIES AND UNLISTED PUBLIC COMPANIES

47. BUYBACKS BY PRIVATE COMPANIES AND UNLISTED PUBLIC COMPANIES – INDICATIVE TIMELINES FOR TENDER METHOD THROUGH SHAREHOLDERS’ APPROVAL ROUTE
Activity
Day
Board meeting to approve buyback T
Conduct EGM at shorter notice to pass special resolution for buyback
Despatch letter of offer to shareholders
T + 8
Offer opens
T + 9
Offer closes
T + 10
Payment of consideration
T + 12
Extinguishment of shares
T + 14

48. RECENT BUYBACKS IN INDIA

49. RECENT BUYBACKS IN INDIA – TENDER METHOD
S. NO.
COMPANY
SIZE
(Rs. Crs)
DATE OF OPENING
% OF PD-UP EQ. CAPITAL
% OF FREE RESERVES & CAPITAL
PRICE ON DATE AFTER BoD MEETING
(Rs.)
BUYBACK PRICE (Rs)
BALANCE SHEET – BASIS 1.
Pidilite Industries Ltd
500.00
0.975%
15.07%
915.95
Full Year 2.
Unichem Laboratories Limited
885.80
22.65%
24.26%
358.75
430.00
9 months 3.
MOIL Limited
210.40
3.29%
7.50%
228.00
240.00 4.
Bharat Electronics Limited
372.26
0.83%
5.00%
169.40
182.50 5.
SJVN Limited
801.47
6.98%
37.20
38.75 6.
Swaraj Engines Limited
70.74
2.37%
25.00% 7.
Wipro Limited
7.06%
286.40
320.00
3 months 8.
Infosys Limited
4.92%
24.36%
873.50 9.
Bayer CropScience Limited
499.99
2.89%
All except serial numbers 3, 4 & 5 were through Shareholders’ approval route.

50. RECENT BUYBACKS IN INDIA – OPEN MARKET METHOD
S. No.
Company
Size (Rs. Crs)
Actual BB as % of Size
% pd up cap bought back
Date of Opening
Date of Closing
% Eq & F. Res
Price after BoD (Rs.)
Ave BB Price
(Rs.)
Max BB Price 1.
VRL Logistics Limited
41.40
91.17%
0.99%
7.65
376.00
419.39
460 2.
Just Dial Limited
83.91
99.93%
3.22%
9.998
382.20
374.18
700 3.
The Ramco Cements Limited
90.00
93.17%
1.05%
6.07
675.90
670.80
720 4.
IndiaBulls Real Estate Limited
540.00
50.38%
6.72%
9.81
70.55
79.91 90
All the above four were through Board of Directors’ approval route and all were based on full year Balance Sheets.

51. A FEW CASE STUDIES

52. PRE-BUYBACK PROMOTER HOLDING% POST-BUYBACK PROMOTER HOLDING%
A FEW CASE STUDIES- PRE & POST BUYBACK PROMOTER SHAREHOLDING IN CASE OF BUYBACK THROUGH TENDER ROUTE [as per Letter of Offer]
S. NO.
NAME OF COMPANY
PRE-BUYBACK PROMOTER HOLDING%
POST-BUYBACK PROMOTER HOLDING% 1.
Pidilite Industries Limited ^
69.59% 2.
Unichem Laboratories Limited
50.05%
51.58% 3.
MOIL Limited
65.58%
65.84% 4.
Bharat Electronics Limited
66.72%
66.79% 5.
SJVN Limited
89.73%
90.36% 6.
Swaraj Engines Limited
50.61%
50.75% 7.
Wipro Limited
73.18%
73.94% 8.
Infosys Limited
12.75%
12.92% 9.
Bayer CropScience Limited
68.58%
68.85%
^ Seems to be incorrect. If Promoters are tendering shares, 15% of the buyback size is reserved for small shareholders and 100% acceptance is assumed, the Promoters’ shareholding should increase in a similar manner as is the case with the rest of the above.

53. A FEW CASE STUDIES- PRICING
Company
Parameter 1
Parameter 2
Pidilite Industries Limited
Premium of 20.80% over the VWAP on BSE for 3 months preceding the date of intimation to BSE for Board Meeting.
Premium of 15.40% over the VWAP on BSE for 2 weeks preceding the date of intimation to BSE for Board Meeting.
MOIL Limited
Premium of 0.36% over the closing price on BSE as on date of intimation to BSE for Board Meeting.
Premium of 3.83% over closing price on BSE on the date of Board Meeting for approving the Buyback.
Bharat Electronics Limited
Premium of 3.60% over WVAMP on BSE for 2 weeks preceding date of intimation for Board Meeting.
Premium of 5.07% over closing price on BSE on the date of intimation for Board Meeting.
SJVN Limited
Premium of 16.42% over the VWAMP on BSE for 6 months preceding the date of intimation to BSE for Board Meeting.
um of 15.57% over the VWAMP on BSE for 2 weeks preceding the date of intimation to BSE for Board Meeting.
Swaraj Engines Limited
Premium of 19.56% over the VWAMP on BSE for 3 months preceding the date of intimation to BSE for Board Meeting.
Premium of 25.54% over the VWAMP on BSE for 2 weeks preceding the date of intimation to BSE for Board Meeting.
Wipro Limited
Premium of 23.87% over the VWAMP on NSE for 60 trading days preceding the date of intimation to BSE for Board Meeting.
Premium of 22.60% over the VWAMP on NSE for 10 trading days preceding the date of intimation to BSE for Board Meeting.
VWAMP = Volume weighted average market price

54. A FEW CASE STUDIES- PRICING …….. contd
Company
Parameter 1
Parameter 2
Infosys Limited
Premium of 19.08% over the VWAMP on BSE for 3 months preceding the date of intimation to BSE for Board Meeting.
Premium of 17.73% over the closing price on BSE on the date of intimation to BSE for Board Meeting.
Bayer CropScience Limited
Premium of 17.81% over the VWAMP on BSE for 3 months preceding the date of intimation to BSE for Board Meeting.
Premium of 9.55% over the VWAMP on BSE for 2 weeks preceding the date of intimation to BSE for Board Meeting.
VRL Logistics Limited
Premium of 29.98% over the closing price on BSE one day prior to date of intimation to BSE for Board Meeting.
Premium of 28.91% over average of weekly high & low of closing prices on BSE during 2 weeks preceding the date of intimation to BSE for Board Meeting.
Just Dial Limited
Premium of 85.60% over average of weekly high & low of closing prices on BSE during 2 weeks preceding the date of Board Approval.
None
The Ramco Cements Limited
Premium of 7.59% over the average of daily WVAMP during 2 weeks preceding the date of Board Approval.
Premium of 23.18% over the average of daily WVAMP during 3 months preceding the date of Board Approval.
Indiabulls Real Estate Limited
Premium of 30% over the closing price on BSE on day prior to Board Approval.
VWAMP = Volume weighted average market price

55. A FEW CASE STUDIES- RATIONALE FOR BUYBACK
Some of the companies have given the following rationale :-
The buyback will help the company to return surplus cash to its members holding equity shares broadly in proportion to their shareholding, thereby, enhancing the overall return to members.
The buyback may help in improving return on equity, by reduction in the equity base, thereby leading to long term increase in shareholders’ value.
The buyback optimizes the capital structure
The current buyback is a capital allocation decision taken with the objective of seeking a fairer valuation of the company’s stock while improving the company’s return on equity and increasing shareholder value in the longer term.

56. SOME OF THE QUESTIONS THAT AROSE IN CASE OF A FEW TRANSACTIONS

57. SOME OF THE QUESTIONS THAT AROSE IN CASE OF A FEW TRANSACTIONS
Can an audited balance sheet for a stub period be the basis for calculations for the purposes of the buyback?
While calculating the buyback size of a company which has subsidiaries, are we supposed to consider the balance sheet on a consolidated basis or a standalone basis?
Completion of buyback – is it the date of closure of the buyback offer or acceptance of shares tendered or date of payment of consideration or date of extinguishment of shares?
In respect of the postal ballot, what is the cut-off date? – Rule 20 – E- voting applies – Companies (Management and Administration) Amendment Rules, 2015.

58. SOME OF THE QUESTIONS THAT AROSE IN CASE OF A FEW TRANSACTIONS …..2
Does the company need to ensure compliance with any SEC rules and regulations?
When should the declaration of solvency be filed with SEBI?
In a buyback through the tender route, how can the promoters’ shareholding increase in a scenario where the promoters are tendering either the entire buyback size or more?
As on the date of the Board of Directors / shareholders’ resolution, the latest audited balance sheet is as on March 31, 2015, what would be the situation, if, after the date of such resolution but before the Letter of offer is approved, the audited balance sheet for a subsequent date is available?

59. CHALLENGES FACED BY A FEW COMPANIES
In case of buyback through tender route of a listed entity, the letter of offer needs to be despatched within 5 working days of receipt SEBI observations on the draft letter of offer. This time limit is not adequate for completion of various formalities that need to be complied with where the number of shareholders is very large. One such company sought specific permission from SEBI to despatch the letter of offer to shareholders through electronic means.

60. NEW BUY BACK REGULATIONS IN THE OFFING –
SEBI BOARD MEETING OF MARCH 28, 2018

61. QUESTIONS AND ANSWER SESSION

62. THANK YOU