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SEBI panel moots six ways for buyback, offer price limit

The expert panel constituted by the Securities and Exchange Board of India for buyback today mooted several proposals and suggested six ways in which buyback of shares can be undertaken.

The SEBI chairman D R Mehta has said that the six modes of buyback facility which had come up at the meeting were tender offer, open offer, reverse book buying, odd-lot buyback, reverse right issue and employees stock option plan.

Sources in the SEBI said the expert panel also suggested offer price limit to be fixed by companies while buying back their shares. The legislation would be simple but would ensure investor protection at the same time. The panel members identified several deficiences in the draft legislation, they said.

The meeting also discussed issues related to payment of buyback either through cash or reserves of the company. The SEBI board will meet on November 10 to consider the norms for buyback facility of shares.

UNI

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