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The buyback process through the tender offer route can be completed within 41 days of the board approval. As per the guidelines, a company would have to publish advertisement in newspapers within 2 days after securing board approval for the buyback and after 5 days it has to file the offer document with the Sebi.
“The offer for buyback should remain open for 10 working days,” Sebi said, adding that within 7 days the company would have to pay the buyback amount to the shareholders. Currently, there are two ways by which a company can come out with a buyback — open market and tender offer. While in open market offer firms can buyback shares from shareholders without knowing the buyer, under tender offer the company has to write to every shareholder saying it is willing to buyback shares in proportion to the issue. The shares proposed to be bought back shall be divided in to two categories — reserved category for small shareholders and the general category for other shareholders, Sebi said.
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