India's SEBI Reintroduces Open-Market Share Buybacks with 15% Capital Cap

The Securities and Exchange Board of India (SEBI) has issued the Buy‑Back of Securities (Amendment) Regulations, 2026, to take effect on 1 August 2026. The rules restore the ability of listed companies to conduct open‑market share buy‑backs through stock exchanges, but limit each buy‑back to less than 15 percent of the company’s paid‑up capital and free reserves, based on both standalone and consolidated statements.

Buy‑back offers must be announced publicly and opened within four working days, with the entire process completed within 66 working days of opening. Engagement of a merchant banker is now discretionary; if a company forgoes a merchant banker, designated entities such as the secretarial auditor, statutory auditor and compliance officer must assume the respective responsibilities. Shares held by promoters or their associates will remain frozen at the ISIN level throughout the buy‑back period. Taxation on the buy‑back is aligned with normal capital‑gain treatment, shifting the tax burden to participating shareholders.

SEBI said, "With effect from August 1, 2026, the buyback from the open market through the stock exchange shall be less than fifteen per cent of the paid‑up capital and free reserves of the company," emphasizing the aim to improve flexibility, execution efficiency and shareholder equity in capital‑management practices.