How to Apply for Buyback in Zerodha?

In our former post, we’ve given a detail information on what the buyback is in the share market, what is the requirement of it and how the investors get benefited by it. If you are a regular follower of the market, you may get different news on buy backs of various companies. Here, as investors our concern should be how can we get profit through the particular mechanism. Our team StockManiacs (Marketing Partner of Zerodha) will guide you stepwise How to Apply for Buyback in Zerodha. After providing a brief introduction on the buy back we will move to the main content how to apply for it.

What is the Buy Back in the Stock Market?

Buyback is a particular mechanism by which enables a company to purchase back its own shares from the shareholders or the market. The buyback can be done through two ways, the open market purchase or through the tender route. In the Open market, the company buys back its own share from the secondary market. On the other side, under the tender offer, investors can tender shares during the buyback offer. Previously, most of the market preferred the open market route.

How to Apply for Buyback in Zerodha?

Suppose, currently you hold stocks of a specific company and the company announces a buy back. In this scenario, if you wish you may participate in the buy back program through your broker. Here, we will place Zerodha as an example. The Steps are given below:

Firstly, you have to have an ACCOUNT with ZERODHA. From the Zerodha Back Office or Console, one can apply in the buy back in Zerodha. After reaching to the console page, we will have a page like this:

How to Apply for Buyback in Zerodha

After that, select your preferred stock and select “options” and then click on “place order”.

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buy back in zerodha

Lastly, enter the number of shares you want to tender and select the ‘Submit’ option.
buy back shares in zerodha

For buy back tenders, charges will be applied Rs.20+18% GST.

Important Points

  •  When the buyback window closes, the acceptance ratio will be calculated. It depends on the number of shares tendered and the number of retail investors (applied for the buyback).
  • If investors tender more shares than their entitlement, then either these additional shares will be accepted for buyback or not will solely depend on the acceptance ratio (decided by the company).
  • The details of upcoming buybacks can be found on Zerodha Bulletin.

Limitations:

  • All buybacks can’t be applied using Zerodha Console. In case, if the buyback option can’t be seen in Console, investors have to send a scanned copy of the “Tender Form”. They can fill up the tender form by creating a ticket. The company will send the updates to their registered email ID or address.

The article How to Apply for Buyback in Zerodha will guide investors properly.



Categories: Stock Market Basics, Zerodha

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