NEW DELHI: Share buyback announcements tend to excite investors as the buyback price is usually at a premium compared with the prevailing market price at that point.But is it really exciting news ? That depends from company to company and under what circumstances a particular company has announced share buyback. One should study and analyse the offer before tendering shares In simple terms, share buyback means repurchase of shares by the company. It can happen in three ways -a) either the company purchases its own shares in open market,b) issue a tender offer and lastly,c) negotiate a private buyback.Attempt to boost earnings per share (EPS): One of the common reasons why companies go for share buyback is to boost earnings per share (EPS), because share buyback reduces outstanding shares in the market. In the case of TCS buyback, for instance, the buyback price is at a premium of 13.7 per cent over Monday’s closing price.

Source: Economic Times February 21, 2017 06:19 UTC