When company says its gonna buy back its own shares through open market. What is open market here? Its not goint to do buy back though stock market?

here open market means…purchasing stocks from existing share holders of company… who purchase stocks from stock markets…

for eg:- today ‚ÄúDr Reddys‚ÄĚ announce plan of buy back its shares upto value of 3500‚Ķ

it means‚Ķ say i purchase shares of ‚ÄėDr Reddys‚Äô at 3600 in october‚Ķ but now is stock is at 2800‚Ķ so, i receive upto 3500 rs per share from ‚Äô Dr Reddy"

Generally, company announce buy back plan when its stock fall too much because of any news…

so, to increase confidence of investors, company annouces buy back of shares at higher value than market price…

so, that investors feel that in future if anything bad happen, company is with them… and company help them in not losing there capital… they will buy back share or give bonus shares…

overall, they just do this for increase confidence and faith of investors in company…

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thank you shivam, i am new to the market and still learning…

my pleasure… you can ask anytime if any question arise in your mind… always ready to help you… as much as possible from me…

How to apply for this kind of buyback? If it is through the tender process then we can offer our shares by filling a tender form or through back office of Zerodha but how to offer shares in an open market type of buyback?

@Shivam_Gupta , @shivamrao37: Y ou just can not participate in OPEN MARKET BUYBACK .live cases are Td power ,Thyrocare,music broadcast ,dcm shriram ,mcleod russel . this type of buyback remain open for 6 months and company can conclude midway on achieving 50% target.the company will buy from stock exchanges through a bse/nse broker like you and me buy and at much lower than maximum price fixed .
only in PROPORTIONATE METHOD FIXED PRICE BUYBACK shareholder can participate and such buybacks are generally remain open for 5-6 days only…recent exmaples are: TCS ,Hcl tech ,navneet publication ,larsen -tourbo ,Mphasis ,Redington etc.

@sampath_topc: YES in open market buyback company is buying at stock exchanges through a bse/nse broker like you and me buy and the purchases are at much lower price than maximum price fixed. there is no direct participation possible but during the 6 month schedule when company buys almost on daily basis you can also sell your shares at the prevailing market price.