- +91 80768 85539
- info@expertvuw.com
- Pan-India service available.
Home / SEBI & Capital Markets / Buy-back of Shares by Listed Companies
Last updated: 2 October 2026
A listed company buying back its own shares must meet both the Companies Act and SEBI’s Buy-back Regulations. Expertvuw’s team handles the corporate approvals, disclosures and filings, working with the merchant banker, registrar and stock exchanges on the chosen route.
A buy-back lets a company return surplus cash to shareholders by purchasing its own shares. For listed companies, it is governed by section 68 of the Companies Act, 2013 and the SEBI (Buy-back of Securities) Regulations, 2018. Under the Companies Act, a buy-back up to 10% of paid-up capital and free reserves can be approved by the board, and up to 25% with a special resolution of shareholders; the post buy-back debt-to-equity ratio generally cannot exceed 2:1.
The tender offer route, where all shareholders can tender shares proportionately with a reservation for small shareholders, remains the main method. SEBI had phased out the open market route through stock exchanges from April 2025, but reintroduced it with revised conditions effective August 2026, including a lower size limit, a completion window and restrictions on promoter participation.
The tax treatment of buy-back proceeds for shareholders has changed more than once since October 2024, so each shareholder group’s tax position should be checked before announcement.
Basis: Companies Act, 2013 (sections 68–70) and Companies (Share Capital and Debentures) Rules, 2014; SEBI (Buy-back of Securities) Regulations, 2018, as amended including 2026 amendments; Income-tax provisions on buy-back. Last updated: 27 September 2026.
Up to 10% of paid-up capital and free reserves can be approved by the board.
Up to 25% with a special resolution.
Post buy-back debt-to-equity generally must not exceed 2:1.
Proportionate participation with a reservation for small shareholders.
Reintroduced by SEBI effective August 2026, with revised conditions.
Restrictions apply on further issues and repeat buy-backs within specified periods.
Buy-back errors usually relate to limits and timelines.
r
i
r
Buy-back connects with these services.
Ongoing LODR compliance.
PIT compliance during the buy-back.
Buy-back by private and unlisted companies.
Tax review for capital actions.
Check limits, route and funding.
Board and shareholder approvals.
Public announcement and filings.
Letter of offer and tender or market purchases.
Payment and acceptance.
Extinguish shares and file returns.
Closing steps are time-bound.
x
i
p
b
Share your query and our team will reply during business hours.
Up to 10% of paid-up capital and free reserves with board approval, and up to 25% with a special resolution, subject to SEBI limits.
SEBI reintroduced the open market route with revised conditions effective August 2026, after phasing it out in April 2025.
Promoters can participate in tender offers subject to conditions, but are barred from open market buy-backs.
A SEBI-registered merchant banker manages the offer, with the company’s secretarial and legal teams handling corporate approvals and filings.
The tax treatment has changed since October 2024. Check the current position for each shareholder category before announcing.
ACS – Director, Expertvuw Management Pvt Ltd
SEBI applications and filings are prepared by Expertvuw’s team. Certificates, audits and due diligence that SEBI regulations reserve for practising professionals or registered intermediaries are provided by independent registered professionals, and representation before SEBI or SAT is made by advocates or authorised professionals.