The Securities and Exchange Board of India (SEBI) on April 02, 2026, issued the consultation paper on Re-introduction of Open Market Buy-Back via Stock Exchange.
It seeks public feedback on reintroducing the open market buy-back of shares through the stock exchange as an additional mechanism under the SEBI (Buy-Back of Securities) Regulations, 2018. Previously, companies could repurchase shares either through a tender offer or via the open market (including stock exchanges). However, the stock exchange route was phased out and fully discontinued by April 1, 2025, due to concerns around unequal participation among shareholders and tax inefficiencies, where only certain investors benefited from tax exemptions depending on whether their orders were matched.
Since then, significant changes in the taxation regime under the Finance Act, 2026, and the Income Tax Act, 2025, have shifted the tax burden from companies to shareholders and aligned buy-back taxation with capital gains. This has effectively removed the earlier disparity between shareholders who could participate in buy-backs and those who could not. Additionally, industry stakeholders such as the Federation of Indian Chambers of Commerce and Industry and the Association of Investment Bankers of India have advocated for reinstating this method, highlighting its global acceptance, ability to stabilize markets, absorb selling pressure, and enhance shareholder value.
In light of these developments, SEBI proposes to reintroduce buy-backs through stock exchanges with existing regulatory safeguards, such as a separate trading window, restrictions on price and volume, exclusion of promoters from participation, and mandatory disclosures. The objective is to provide companies with greater flexibility in capital management while ensuring transparency, fairness, and equal opportunity for all shareholders. Public comments on this proposal are invited before April 23, 2026, by the link provided.
In case of any technical issue in submitting your comments through the web-based public comments form, you may send the public comments to the email [email protected] with the subject: ‘Re-introduction of Open Market Buy-Back of Shares or Other Specified Securities through Stock Exchange’.
Please refer to the document attached below for more details.
