From technology to PSU, companies are making a beeline to buyback their shares. The question for shareholders is if they should tender in their shares.
When companies announce a buyback or add buyback on their board meeting's agenda, the share price surges. The logic is simple - the company is returning the extra cash from the balance sheet to the shareholder and given that post the buyback the number of shares will go down, the EPS will go up.
However, as a shareholder, when you decide to tender your shares in a buyback, it is equivalent to you selling your share. So the factors considered when selling your share should be kept in mind. Santosh Kumar Singh, Head of Research, Motilal Oswal Asset Management says if the fundamental value of the company is lower than the buyback, you should tender in your shares. Listen in to know how you can figure that.
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