Sebi board approves reintroducing open-market window for share buybacks from August 1

Markets regulator Sebi on Friday said that its board has approved a proposal to reintroduce open-market buybacks. The new mechanism will come into effect from August 1, Sebi chief Tuhin Kanta Pandey said at a press conference.

Currently, companies are permitted to repurchase shares through tender offers, where shareholders participate proportionately, or via odd-lot buybacks and other structured routes. The open market mechanism through stock exchanges, however, was earlier phased out due to concerns around inefficiencies and lack of equitable participation.

The open market route typically allows companies to buy shares directly from the secondary market over a period, offering flexibility in execution and timing. However, it has historically been criticised for not guaranteeing participation to all shareholders and for enabling companies to influence market prices.


Under the new regime, the limits for the open market buyback period will be 60 days.

Buybacks are widely used by companies as a capital allocation tool to return surplus cash to shareholders, improve earnings per share, and signal confidence in future prospects. The absence of the open market route has limited execution options, particularly for firms looking to stagger purchases over time rather than commit to a fixed tender offer.