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SEBI Proposes Faster 66-Day Buyback Rule to Boost Shareholder Value

SEBI has proposed new measures to strengthen the buyback framework, including a 66-day completion timeline for open-market buybacks. Companies must use at least 40% of the buyback amount within the first half of the offer period. The regulator may freeze promoter shares during the buyback period as an additional safeguard. SEBI also proposes removing separate trading windows and aligning buyback intervals with the Companies Act.

Key Points: SEBI Tightens Buyback Rules: 66-Day Timeline, New Safeguards

  • SEBI proposes 66-day completion timeline for open-market buybacks
  • Companies must use at least 40% of buyback size in first half of offer period
  • SEBI may freeze promoter shares at ISIN level during buyback period
  • Regulator removes need for separate trading window for buyback transactions
2 min read

SEBI mulls additional changes to strengthen buyback framework

SEBI proposes major changes to open-market buybacks: 66-day timeline, 40% minimum usage in first half, and new safeguards for minority shareholders.

"A six-month-long period proposed by PMAC may make buybacks irrelevant in the context of market developments and could prove difficult for shareholders to track - SEBI"

Mumbai, May 9

The Securities and Exchange Board of India has proposed additional measures to its plan to reintroduce open‑market buybacks through stock exchanges, including a shortened completion timeline and new safeguards for minority shareholders.

SEBI, after consultation with the Primary Market Advisory Committee (PMAC), said companies would be allowed to undertake open‑market buybacks which must be completed within 66 working days from the offer opening, and must use at least 40 per cent of the buyback size within the first half of the offer period.

The regulator said a 66-day timeline is warranted due to recent changes under the Finance Act, 2026 to the Companies Act, with respect to the permissible gap between two buyback offers, which necessitates a balanced approach.

The regulator said that a six-month-long period proposed by PMAC may make buybacks irrelevant in the context of market developments and could prove difficult for shareholders to track.

As an additional safeguard, SEBI may direct freezing of shares and other specified securities held by promoters and their associates at the ISIN level during the buyback period. Existing rules bar promoters from dealing or transferring company shares from the board decision until the buyback closes.

The regulator has proposed removing the requirement for a separate trading window for buyback transactions and conducting such trades through the normal market mechanism.

Further, it proposed dispensing with the requirement to display the company's identity as a purchaser on the trading screen.

The regulator also proposed introducing an explicit provision to ensure buybacks do not breach minimum public shareholding norms and aligning the interval between two buyback offers with provisions under the Companies Act, 2013.

It also mulls making companies mandatorily send an intimation to shareholders through electronic mode regarding the buyback offer within one working day of such public announcement.

- IANS

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Reader Comments

D
Divya L
Removing separate trading window and not showing company identity on screen – that’s a bit concerning. How will retail investors know if a big player is buying back? Transparency matters!
R
Rajesh Q
Good move to freeze promoter shares during buyback – stops them from dumping stock while buying back. But why not extend the safeguard to all large holders? Minority investors need full protection in open market ops. 🇮🇳
N
Nikhil C
SEBI aligning with Companies Act is smart – avoids confusion between two regulators. But I hope they also simplify the intimation process for retail. Email is fine but many small shareholders don’t check inbox daily.
P
Priya S
Finally some sense! 6-month buyback is a joke – market changes so fast. 66 days is tight but doable. Also like the rule to avoid MPS breach – keeps public float healthy. Well done SEBI! 👏
T
Tanya I
Question: If buybacks go through normal market mechanism, won’t it just drive up prices artificially? Promoters might manipulate timing. SEBI needs to monitor for front-running by insiders. Otherwise, good reform overall.
K
Karthik V
The 66-day timeline makes sense – companies will have to act quickly and commit real resources. But the 40% rule might be

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