There may be different ways to look at it.
If a company is buying a small %age of its stocks, a open market repurchase perhaps make more sense from a time and effort perspective. Is it however, open to abuse. For example, it may be gamed and used to bail out an investor or group of investors (dont think an Infy would ever do that, but theoritically possibility exists).
On the other hand when you want to buy a larger % of outstanding stock, it makes sense to put in time and effort to do the same by tender route. It is equitable to all class of shareholders. In Cosmo’s case, for example, their FY22 standalone networth is around 1100Crores. In tender route they can do a buyback of say 250 crores (vs 100 crore in open market). Given they have 400Crores sitting in investments in shares and debentures/bonds/MF’s etc, it makes emminent sense to go whole hog, when the company has literally nothing better to do with the money and is earning decently every quarter.
The value of a company doing buyback typically goes up. It is immaterial whether it is thru tender route or open market route. The amount of buy-back is the determining factor, rather than mode. If you are doing a 1-2% buyback, generally in lieu of dividend, it won’t move the needle much. If you do a larger one, say a 5%+ range, it moves the needle significantly.
As a final point, in open market route, 20% of the buyback tax is totally wasted from a share-holders perspective. In tender route, part of it is realized by the shareholders depending upon the acquisition price.
I am personally biased towards tender route as it is transparent, more tax efficient and gives choice to shareholder whether to participate or not.
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