Buyback Calculator
Calculate returns from share buyback tender offer. Includes acceptance ratio sensitivity & net return analysis.
Acceptance Ratio Sensitivity
| Ratio | Accepted | Profit | Return |
|---|---|---|---|
| 10% | 10 | ₹12,000 | 13.3% |
| 25% | 25 | ₹15,000 | 16.7% |
| 50% | 50 | ₹20,000 | 22.2% |
| 75% | 75 | ₹25,000 | 27.8% |
| 100% | 100 | ₹30,000 | 33.3% |
Frequently Asked Questions
What is a share buyback?
A buyback is when a company repurchases its own shares from existing shareholders, usually at a premium to market price. It reduces outstanding shares and can boost EPS and stock price.
How does the tender offer work?
Company announces a buyback price and quantity. Shareholders can tender their shares. If more shares are tendered than the buyback size, acceptance is proportional (acceptance ratio).
What is acceptance ratio?
If a company wants to buy back 1 lakh shares but shareholders tender 5 lakh shares, the acceptance ratio is 20%. Only 20% of your tendered shares will be bought back at the premium price.
Is buyback income taxable?
From Oct 2024, buyback proceeds are taxed in the hands of shareholders as deemed dividend at their slab rate. Earlier, the company paid buyback tax. Check the latest rules at the time of the buyback.
Should I participate in a buyback?
If the buyback price has a significant premium (15%+ over market), it can be profitable even with low acceptance ratios. Calculate the effective return considering acceptance ratio and holding period.