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Share Buybacks in India: An Empirical Analysis

Author

Listed:
  • Sudershan Kuntluru

    (Indian Institute of Management, Kozhikode)

  • Kevin Thomas Chacko

    (Indian Institute of Management, Kozhikode)

Abstract

Share buybacks have become a common event in the financial markets across the globe. Existing literature on academicians and practitioners view on distribution decisions is inimical. Dividends and share buyback are popular ways of rewarding shareholders. The fiscal year 2017 has seen a record number of share buyback offers from cash-rich Indian corporates. First time in the history of Indian Capital markets, the number of share buyback offers has exceeded the initial public offers. The present study examines the impact of share buyback on market performance of the firms based on earnings per share and abnormal returns. It is posited that share buyback contributes to shareholders returns. Empirical results indicate that the short-term market returns are higher than the long-term market performance. It implies that share buyback has a positive and significant impact on short-term returns as compared to long-term returns. The results are useful to investors, managers and regulators.

Suggested Citation

  • Sudershan Kuntluru & Kevin Thomas Chacko, 2019. "Share Buybacks in India: An Empirical Analysis," Working papers 333, Indian Institute of Management Kozhikode.
    • Handle: RePEc:iik:wpaper:333
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    References listed on IDEAS

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    1. repec:bla:jfinan:v:53:y:1998:i:1:p:313-333 is not listed on IDEAS
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    4. Jaemin Kim, 2007. "Buyback trading of open market share repurchase firms and the return volatility decline," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 3(4), pages 316-337, October.
    5. asim mishra, 2005. "An Empirical Analysis Of Share Buybacks In India," Finance 0507001, University Library of Munich, Germany.
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