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Price behaviour araund share buyback in the Indian market
Share repurchase is becoming an important corporate practice in India of late. But, there exists a paucity of systematic study regarding the motives, nature and impact of buyback on share prices of respective companies. This article makes an attempt to examine the effect of share repurchase announce...
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| Format: | Article |
| Language: | English |
| Published: |
2015
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| Summary: | Share repurchase is becoming an important corporate practice in India of late. But, there exists a paucity of systematic study regarding the motives, nature and impact of buyback on share prices of respective companies. This article makes an attempt to examine the effect of share repurchase announcement by Indian companies through open market route during 2008 - 2012 on their share prices around the announcement date. The article contributes to the literature by analyzing the market reaction to share buyback announcement, by applying the market model not used so far in the Indian context and by undertaking a rigorous analysis of share repurchase. Though share repurchase has not come up yet as a regular or useful practice by Indian companies like those in the US or Canada, our analysis does throw some light on the issue with interesting findings. First, unlike the US market, the trend in average additional return does not support any motive like undervaluation or maximizing shareholders |
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| Physical Description: | 425 - 438 |