three things to know about buybacks - what's the best air purifier to buy

The news that the company announced the repurchase in fiscal 2017 has been in the news.
So far this year, about 50 companies have announced buybacks, amounting to more than 51 rupees. TCS’ ₹16,000-
Crore buyback, the largest Indian company to date, is one of the newest members of the list.
More companies are also likely to join the trend. Here’s the low-
And how investors evaluate these stocks.
What is repurchase?
Repurchase is the company's plan to buy back a certain number of issued shares.
Once recovered, the shares were wiped out by the company.
Typically, companies with excess cash in kitty, no specific investment, or other deployment requirements may consider buying back.
In this case, reducing the number of shares helps to increase the earnings per share of the continuing shareholders and increase the return on equity.
If the promoter wants to increase its stake in the company, sometimes in order to avoid any threat of acquisition, it is also possible to buy back the shares from the public.
Repurchase can be done by bidding quotation route or public market purchase.
In the former, the company determines the repurchase price and accepts the stock proportionally during the repurchase period.
An offer will be issued to shareholders;
The form will be filled in with the necessary details and sent back to the company with the required documents.
Promoters are allowed to bid on their shares on this route.
The company's subtle connection with cash under open market purchases sets the highest price and buys back shares from the market within the specified time.
Promoters cannot take part in this route.
The decision of shareholders to participate in the repurchase is based on some variables specific to the stock --
Such as the repurchase price, the number of shares that can be sold, and the prospects of the company, etc.
Investors need to pay attention to three factors before taking risks.
Acceptance rate at the time of repurchase (tender offer)
Announcing an exit from the stock or booking some profit at a price you find attractive, the "acceptance ratio" plays a role in deciding how many shares you can actually sell.
TCS plans to buy back 5 with 16 thousand crore.
Rs 850 per share, 61 shares per share (
Market price from date of announcement 2,506)
Calculated in scale.
This accounts for about ten per cent of 52 countries.
55 shares of crore held by the public, which means that only about 10 of every 100 shares may be accepted under the public repurchase program.
In fact, not all shareholders bid, and even those who bid may not give up all their shares.
The degree of actual acceptance may be higher.
Reservations to minority shareholders can also be better accepted by these investors. SEBI (
Securities and Exchange Commission of India)
Repurchase offers that have been authorized to be reserved for retail investors holding up to 2 lakh (
Market value as of record date).
For example, the Indian Coal Company (Coal India) offered a repurchase offer.
During the period from October 2016, the 650 crore shares were 89 crore.
This is about 8.
128 of the total public shareholding.
53 crore shares, which means only about 8 of every 100 shares may be accepted.
But thanks to the reservation number 1.
63 crore shares are minority shareholders, and the company proposes to repurchase 5 shares per 22 shares (i. e.
About 23 shares per 100 shares)from them.
Other general shareholders, 5 shares per 337 equity interest shares are the repurchase ratio (i. e.
About 1.
5 shares per 100 shares).
Dividends, repurchase, but only 28 in the end.
5 lakh small investor shares were eventually bid in the repurchase, so bids in this category were accepted.
Bottom line: acceptance is still an external card factor.
But if you fall within the definition of a minority shareholder and find that the repurchase price is attractive enough to bid, then you may not end up with an original transaction.
When the company decides to buy back in an open market manner, investors need to consider something.
First, although the company may announce the highest repurchase price, it does not mean that investors who sell during the repurchase will be aware of the highest price.
The company can actually buy several parts at different prices, and the whole process is executed like any other buying and selling transaction in the market.
They may also not use the full amount reserved for the repo.
2013 The SEBI regulation provides that, in certain exceptional circumstances, such as the stock price (i. e.
Weighted average volume)
Exceed the maximum repurchase price during the repurchase period.
Take ADF food, a small one.
Stocks purchased in the open market in August 10-
November 15, 2016.
The company is proposing to use RS 18 to buy back shares at a price of up to £ 25.
The stock price surpassed the highest repurchase price in August 2016 and has remained high since then.
As a result, the company only used iOS9. 63 crore (53. 5 per cent)
The expected price for the repurchase is Rs 18.
In this case, if the share price continues to be higher than the maximum repurchase price after the repurchase, the shareholder can sell even after the repurchase period.
But take the example of Dr. Reddy’s Labs.
At the date of the announcement of the repurchase, 500 in the middle
On February 2016, the actual share price was 961.
With the repurchase period set between April 18-20, 2016 and June 28, the share price rose steadily by the beginning of July 2016, exceeding 500.
But since then, the stock has been falling, trading at around 700.
When the repo window opens, investors who do not take advantage of the opportunity to sell their shares could be a hassle today.
Bottom line: according to the repo announcement, it is not an easy decision to call for a sale in the open market and when it will be sold.
Rather, it boils down to the level of return you are satisfied with and how long you want to invest.
Since the repurchase price is usually set at a premium higher than the current market price, the repurchase announcement sends a positive signal of the stock.
Ideally, it says the stock valuation is too low and management confidence in the company's prospects.
But in some cases, buybacks are a tool to help keep stock prices high, especially when markets are in turmoil or companies are facing some downside.
This is one of the reasons for buying back stocks to lose their luster in the medium and long term. (eg.
Dr. Reddy of Cairn India).
In the long run, it is very rare for stock prices to remain above repurchase prices.
Unilever Hindustan (HUL)
This is a good example.
The company saw two repurchases in 2007 for a price of 230 and 280 of the repo, each with a repurchase amount of 6630-08 and 2010-11.
Stocks have not returned to these levels since then.
It has now steadily climbed to about 900 900.
The stock has also reappeared.
From 20-
It traded about 6-30 times in the past. 7 years ago.
Bottom line: If you're really long
Long term investors hold stocks with solid fundamentals and ignoring buyback offers may be the best way to keep multiple sharesbaggers.