BUYBACK OF SHARES:A CRITICAL STUDY

A Rough Draft submitted in partial fulfilment of the course Corporate law I,7th
SEMESTER during the Academic Year 2019-2020.

SUBMITTED BY:
Anupama Soumya
Roll No. - 1613
B.B.A LL.B

SUBMITTED TO:
Ms. Nandita S. Jha

August, 2019
CHANAKYA NATIONAL LAW UNIVERSITY, NAYAYA NAGAR,
MEETHAPUR, PATNA-800001
 INTRODUCTION

Financial restructuring is a decision involving use of business acumen & knowledge of all
possible financial strategies. Corporate financial strategy involves either paying out excess cash
or retaining the earnings. An important financial decision involves choosing between retention
and payout. Companies pay out their excess cash in many different ways, either by paying
dividends or by buying back shares. The decision to buyback shares rather than using any other
method involves different considerations embarking upon the short term & long term
profitability of the concern. Their increased usage over the last few years has triggered
increasing debate over their relevance and effective usage by Indian companies

The share buyback practices are regulated through several laws and regulations with a view to
prevent unscrupulous efforts and the disastrous outlets arising therefrom. Such legal restrictions
and guidelines are considered to be necessary for the effective implementation of this practice of
share buyback and also to protect the interests of the share holders and the economy of the
nation.

However, these laws and regulations vary from one country to another depending upon the state
of the corporate scenario of the concerned nations. In India, buyback of shares by companies are
regulated by sections 77 A, 77 AA and 77B of the Companies Act, 1956. These sections were
incorporated by the Companies (Amendment) Act, 1999 which was enacted after the
promulgation of the Ordinance by the Government upholding the sanctity of share buyback by
companies. Apart from this Act, the share buyback practices by the listed companies are
regulated by the SEBI (Buyback of Securities) Regulations, originally framed in 1998 and
thereafter amended from time to time.

CHAPTERIZATION

CHAPTER 1: INTRODUCTION
CHAPTER 2: METHODS OF BUYBACK

CHAPTER 3: PROCEDURE AND CONDITIONS TO BE FULFILLED PRE BUYBACK

CHAPTER 4: : DETERRENTS TO BUYBACK

CONCLUSION

RESEARCH METHODOLOGY

Primary method of research was adopted in the making of this project.

Various literary works and Books from the library and the internet, were used extensively in
collecting the information essential for this study.
The method of writing used in this project is primarily analytical.

THE OBJECTIVE OF THE STUDY HAS BEEN:

1. To study the methods and procedure of buyback of shares .

2. To analyse the deterrents to buyback.