1. PRESENTED BY-NIRAJ SAH

2. 1. Open market share purchase: --95% of repurchase is done through this method--Daily re-purchase of shares from market is limited--The company may not openly announce that it will re-purchase shares from open market 3. Fixed price tender offer Single purchase price and number of shares sought are mentioned. Person would like to sell to the company should come with offer of the price and number of shares that he offers to the company. The fixed price is usually set at a premium above the current market price. 4. 3. Dutch auction share repurchases 5. 4.Equal access buy-backs All share holders have given equalopportunity to sell shares to thecompany. 6. 5.Selective buy-backs In broad terms, a selective buy-back is one inwhich identical offers are not made to everyshareholder, for example, if offers are made toonly some of the shareholders in the company.The scheme must first be approved by allshareholders, or by a special resolution(requiring a 75% majority) of the members inwhich no vote is cast by selling shareholders ortheir associates. Selling shareholders may notvote in favour of a special resolution to approvea selective buy-back 7. on-market buy-backs andminimum holding buy-back A listed company may also buy back its sharesin on-market trading on the stock exchange,following the passing of an ordinaryresolution.The stock exchanges rules apply toon-market buy-backs. A listed company may also buy unmarketableparcels of shares from shareholders (called aminimum holding buy-back). This does notrequire a resolution but the purchased sharesmust still be cancelled. 8. CASE STUDY : : BERGER PAINTSCASE STUDY BERGER PAINTS 9. 17 December, 1923- Started Presently Dhingra , their relatives andcompaniescontrolled by them,currently hold 73.53% of the paid-upcapital of the Company. Profit making company having anuninterrupted dividend record since1981. 10. OBJECTIVE To provide an exit opportunity tothose shareholders who so desireIn a manner that does notsubstantially impact the market priceof the Companys shares, has beenmade This is expected to enhance the EPSof the Company in future and createlong-term share value. 11. THE OFFER AND PRICE 12. The number of equity shares bought backwould depend upon the average price paidfor the equity shares bought back.maximum offer price = Rs. 60/- perequity shareaggregate consideration amount=Rs.1859lakhsmaximum number of shares = 3098333equity shares aggregating=1.56% of the total paid upequity shares as on 29 April 2005. 13. The aggregate shareholding of the promotersas on 29 April 2005 is 146543273 equityshares constituting 73.53 % of the listedshare capital of the Company. Share purchased - 1009924 equity sharesThe maximum purchase price - Rs. 37.00 on2 February, 2005The minimum purchase price was Rs. 30.75on 9 November, 2004 Shares Sold - 89620 equity sharesrepresenting inter se sale among promotersonly. 14. IMPACT The buy-back had not impaired thegrowth of the Company and alsocontributes to the overallenhancement of shareholder value. Generated sufficient cash flows tomeet the requirements of the presentbusiness and to its stakeholders. The debt equity = 2:1 15. Restrictions On Buyback A special resolution has to be passed in general meeting of the shareholders. Buyback should not exceed 25% of the total paid-up capital and free reserves. A declaration of solvency has to be filed with SEBI and Registrar Of Companies. The shares bought back should be extinguished and physically destroyed. The company should not make any further issue of securities within 2 years, except bonus, conversion of warrants, etc. 16. Effect of Buy Back on Stock Exchange 17. Contradicting sections on Buy-back of shares in India Section 77 of the Companies Act does notallow a company to buy its own shares untilthe winding up of companies. But the subsequent Section 77A permitsbuyback subject to certain conditions. 18. Section-77 of the CompaniesAct Most of the sections in the Companies Act triesto protect the interest of the outsiders who hadlent money in the form of debentures or loansor deposits by restricting company not to payunless outsiders(loan vendors) are paid fully. Share holders are paid last and has takenmaximum risk in the company. 19. Buy Back Of Reliance Energy 2008 Mr. Anil Ambani (Reliance Energy) bought back 6,50,000 equity shares of the company in the morning on Tuesday at nearly Rs.1,279.23/share aggregating Rs.831.5 million. Amounting 10 % the company`s equity and free reserves.Reason:- To increase the price of its shares.Result:- At noon Friday, shares of the company were trading at Rs.1,310 up by Rs.28.20 from its previous close at the BSE. 20. Buy Backs in Future Reliance Industries, 12 crores sharesworth Rs 10,440 crores. JP Morgan chase and co, 370 millionshares worth $15 billion Apple, shares worth $10 billionfollowing the end of fourth qtr. 21. CONCLCONCLUSIONUSION CONCLUSION Buybacks should be used as anopportunity to exit only when there isconcern over a companys prospectsor when the post-buyback free float isexpected to shrink considerably. Inmost other cases, buybacks do offerthe lure of an immediate benefitbutyou might be better off as a residualshareholder, and gain from a hike inthe share of assets and profits of the 22. PRESENTED BY-NIRAJ & SISHIR,FF1