EFFECT OF BUY BACK - A STUDY ON SHARE PRICE BEHAVIOR AND OPERATING EFFICIENCY By MR. ROJI GEORGE (AUTHOR) MR. BIJU M.

JOHN (CO-AUTHOR) MR. ARUN ABRAHAM JACOB (CO-AUTHOR)
ABSTRACT

In India the practice share buy back started off in1998 with SEBI clearance, bringing benefits to all stake holders i.e. both the company and the public (share holders) .The main purpose of the company going for buy back is to increase the undervalued share price, prevent from hostile takeover, to maintain a good capital structure and showing a positive signal to the market about the future prospects of the company. The study mainly focuses on share price movements and the operating performance of the company which has gone for buy back and to know how it has benefited both the investor and the company. The main objective is to analyze the share price behavior and operating efficiency of selected companies before and after buy back of shares. The share price analysis is based on event study taking the announcement date as event date and taking event window as 20 days before and 20 days after the announcement. (-20 to +20 days) whereas in operating efficiency analysis the buy back year is taken as base year and the event window is 3 years before and 3 years after buy back. As a whole 80 companies have gone for buy back during the year 1998-1999 to 2005-2006. The share price analysis part is done on the basis of Regression Model. for that we want to RIT –daily share price , RMT- daily index ,Expected Return and then Regression Model is used by using SPSS and their by getting Beta and Alpha. And after that Abnormal Return and Average Abnormal Return and the tool I use is Z-STATISTICS Test. The abnormal return is done for each company on each day.

and Coimbatore CO-AUTHORS Mr. Coimbatore . John & Mr.Wilcox on Signed Rank Test and OneWay ANOVA Test is done in order to check whether there is significant difference in the these variables before and after buyback and to judge whether the performance of the company has improved or not. Karunya University. Arun Abraham Jacob are final year MBA students in School of Management Sciences. AUTHOR Mr.The operational efficiency analysis is done with variables like Operating ratios. we will be able to know how much return the shares of the company has attained post buy back and whether they have earned any positive return under the influence of buy back and how it has benefited the share holders and also evaluate whether the operating performance of the company has improved post buyback . Profitability ratios . Output ratios and Dividend . Roji George is presently a Senior Lecturer in School of Management Sciences. Karunya University. Thus with this study. Biju M.