New tax structure may hit buyback success rate

The success rate of buybacks could drop under the new tax structure as the higher taxes may deter shareholders from tendering their shares during the repurchase programmes.

- SAMIE MODAK

According to PRIME Database, the success rate - difference between the proposed buyback amount and actual repurchase made for buybacks has been an average 98 per cent for the ₹3.1 trillion worth of shares bought back by India Inc since 2015. Typically, the buyback price announced by the company is at a premium of between 5 per cent and 30 per cent to the prevailing market price. This premium is pa