I had participated in Wipro buyback offer and had 625 shares in my demat account that I tendered in the buyback (<2L). Last month all my 625 Wipro shares were deducted from my demat account but today the contract note shows only 329 were accepted in the buyback offer. If this is the case then why did Zerodha deduct all the 625 shares. The same thing happened last year with Infosys buyback. I realised this almost after 4-6 weeks and after I raised the complaint, Infy shares were credited back to my demat account otherwise I would have lost close to 1 Lakh. I want to believe that this is not deliberate but Zerodha doesn’t have the required system in place for buybacks. They should fix this first before working on upgrading anything else. Not happy.
When you participat in a buy back - the company declares the quantum of money they will spend on buy back. So the total number of shares that they can buy back = buy back allocation/ buy back price.
If you are an investor on the recrod date - meaning if you held shares in your demat account on the record date, you can participate after the buy back offer opens. Usually its open for a few days. During this period you can decide if you want to tender for buy back or not. The trivial case is that the current market price is higher than the buy back offer price - so you would rather sell in the market instead of selling back to the company. But usually the buy back offer is at a price higher than the current market price. But lets say you decide to tender for buy back - what are you options ?
You have 2 choices now
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You tender all shares like @Ddude has done. There is no gaurentee all will be accepted, but a fixed minimum is accpeted. But if there were more people who didnt tender than did tender for buy back - you stand a chance to get more than the prorated shares. This is exactly what happened in your case. The shares dont remain with the broker but are actually with the RTA agent of the company who is administering the buy back.
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You tender less shares than you have. Again same rules apply as above - but if its as per prorata share, you are almost gaurenteed to get all sold to the company.
Personally, as a retail trader I feel you should tender all and hope you can get more than prorata share of buyback.
My original post was flagged. I wonder who flagged it? Its my money that has got struck. Mistakes can happen anywhere but this happened again. I am sure that it is not pleasing to anyone who’s money gets struck. For me Nithin is the Jio of brokerage house, whos determination has brought down unreasonable brokerage costs everywhere else but please one should get the freedom to point to any gaps in the system (Eg. Buyback issue) so that Zerodha remains at the forefront for years to come.
Thanks
@lotusdew.smallcase has explained it well.
You can choose to tender any number of shares in a buyback/takeover offer. On your instruction, these shares are debited from your account and made available to the company’s registrar. The RTA calculates the number of shares the company can buyback from you based on the interest other investors have shown.
If not many people take part in the buyback then more shares of yours are likely to be accepted. Money for the accepted shares is credited to your bank account by the registrar and the unaccepted shares get credited back to your demat account.
All your offered shares will be debited /pledged in Buyback or Open offer ( not d listing offers where it is either 100% acceptance or zero acceptance ) but final acceptance can be known only on settlement day , thus if accepted partly , unaccepted quantity will be d-pledged /credited back . this is the normal process .
If that is true, when can I expect to see unaccepted shares back into my account?
result was there on Friday itself and today 09 September is payment date of wipro buyback .
I rechecked my account and the shares are not there yet
My apologies . the result of Wipro buyback was there on Friday ( not unaccepted share credit ). today 09 September is payment date for accepted shares and unaccepted shares too should be there in demat by next working day .