Unfortunately, in India, promoters use buy backs to transfer money from company coffers to theirs. If they sell in open market than they will have to pay LTCG tax and can sell only at market price. So they sell to company at a very absurd premium (say 50%). Existing shareholders can also participate, but their percentage will be miniscule (no of shares that can be tendered is proportional to individual shareholding). This is double whammy for shareholders who don’t participate. In USA buybacks are done at market price to extinguish shares and increase value for shareholders.
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