SEBI Revives Open Market Buybacks

The Securities and Exchange Board of India (SEBI) has decided to restore the open market share buyback mechanism for listed companies, providing significant relief to corporates. The revised regulations will come into effect from August 1, 2026, allowing companies to repurchase their own shares through regular stock exchange trading.

Under the new rules, listed companies must complete the buyback process within 66 working days. SEBI has also removed the requirement for a separate buyback window, enabling companies to carry out buybacks through the normal trading mechanism, making the process more efficient and time saving.

However, companies will have to comply with certain conditions. The value of an open market buyback cannot exceed 15% of the company's paid up capital and free reserves, calculated on the basis of standalone or consolidated financial statements. SEBI had phased out this mechanism in 2025 over concerns about unequal benefits to investors and tax related issues. The regulator believes the revised framework will help companies return surplus cash to shareholders while supporting share prices during market volatility.