BSE Limited, formerly known as the Bombay Stock Exchange, is the oldest and largest stock exchange in India. It offers trading in various segments such as equity, debt, derivatives, mutual funds, and SME equity. It also provides various services such as market data, clearing and settlement, risk management, IT solutions, index products, and financial education.
BSE has recently announced a buyback of its own equity shares from the open market through the tender offer route. A buyback is a process by which a company repurchases its own shares from shareholders and reduces the number of outstanding shares in the market.
A buyback can have several benefits for the company and the shareholders, such as improving earnings per share, enhancing return on equity, increasing shareholder value, and signaling confidence in the future prospects of the business.
In this blog post, we will discuss the details of the BSE Share Buyback Program in 2023, such as the buyback price, record date, ex-date, history, and whether investors should tender their shares or not.
Consider reading: BSE Share Price Target
BSE Share Buyback Price
The BSE board has fixed the BSE Share buyback price at Rs 1,080 per share, which is a premium of over 32% from the original offer price of Rs 816 per share. The revised buyback price is also higher than the current market price of BSE shares, which closed at Rs 1,050.95 on September 1, 2023.
The total amount allocated for the buyback is Rs 374.80 crore, which represents 9.99% of the total paid-up equity share capital and free reserves of the company as on March 31, 2023. As per the revised buyback offer, BSE will now be buying back 34.70 lakh equity shares, representing a 2.56% stake of the company.
BSE Share Buyback Record Date
The record date for the BSE Share Buyback Program is September 14, 2023. This means that only those shareholders who hold BSE shares as of this date will be eligible to participate in the buyback offer. The shareholders can either tender their shares through their broker or directly through their demat account.
BSE Share Buyback Ex-Date
The ex-date for the BSE Share Buyback Program is September 13, 2023. This means that if a shareholder sells BSE shares on or after this date, he or she will not be entitled to participate in the buyback offer. The ex-date is usually one day prior to the record date.
BSE Share Dividend History
This is not the first time that BSE has announced a buyback of its own shares. In fact, BSE has a history of rewarding its shareholders through buybacks and dividends. Here is a table that shows the previous buybacks and dividends declared by BSE in the last five years:
|Year||Buyback Price (Rs)||Buyback Amount (Rs crore)||Buyback Shares (lakh)||Dividend Per Share (Rs)|
Source: BSE website
As we can see from the table, BSE has been consistent in paying dividends to its shareholders every year since its listing in 2017. However, this is the first time that BSE has announced a buyback of its own shares at such a high price.
Should Investors Tender Shares in the BSE Share Buyback Program?
The decision to tender shares in a buyback offer depends on various factors, such as the buyback price, the market price, the tax implications, and the future outlook of the company. Here are some points that investors should consider before tendering their shares in BSE Share Buyback Program:
- The buyback price of Rs 1,080 per share is lower than the current market price of Rs 1114 per share as of September 1, 2023. This means that investors can sell their current shares in open market to get more returns.
- The buyback price is also higher than the average cost of acquisition of BSE shares for most investors who bought them during the IPO or later. The IPO price of BSE shares was Rs 806 per share in 2017. Since then, the share price has fluctuated between Rs 500 and Rs 1,100, with an average of around Rs 800. Therefore, investors can also reduce their holding cost by tendering their shares at a higher price.
- The buyback offer is subject to a maximum acceptance ratio, which is the percentage of shares tendered that will be accepted by the company. The maximum acceptance ratio for BSE Share Buyback Program is not yet disclosed, but it will depend on the number of shares tendered by the shareholders and the number of shares reserved for different categories of shareholders. The higher the acceptance ratio, the more beneficial it is for the shareholders who tender their shares.
- The buyback offer is also subject to tax implications, which vary depending on the holding period and the income tax slab of the shareholders. The buyback proceeds are treated as capital gains and taxed accordingly. For long-term capital gains (holding period more than one year), the tax rate is 10% (plus surcharge and cess) if the gains exceed Rs 1 lakh in a financial year. For short-term capital gains (holding periods less than one year), the tax rate is 15% (plus surcharge and cess). Therefore, investors should calculate their net returns after tax before tendering their shares.
- The future outlook of BSE as a company and a stock also matters for investors who want to hold on to their shares. BSE has been facing stiff competition from its rival NSE, which dominates the equity and derivatives segments in India. BSE has been trying to diversify its revenue streams by focusing on other segments such as debt, mutual funds, SME equity, and international exchange. BSE has also been investing in technology, innovation, and new products to enhance its market position and customer base. However, the growth prospects of BSE are uncertain and depend on various factors such as regulatory changes, market conditions, consumer preferences, and competitive dynamics.
Final Thoughts on BSE Share Buyback 2023
If you are looking to tender your shares in the BSE Share Buyback 2023, the current market price of Rs 1114 is a better opportunity to sell than the buyback price of Rs 1050.
The BSE Share Buyback 2023 program is expected to see good interest from institutional investors, as they would like to take this opportunity to sell their stocks at a premium.
If you believe in the India Growth story, then you can keep holding the BSE stock for good returns over the long term. The BSE stock is expected to give excellent returns to stakeholders over the long term.
Please consult your financial advisor before making any financial decisions.
FAQs on BSE Share Buyback 2023
What is the BSE Share Buyback 2023 Price?
The BSE Share Buyback 2023 Price is Rs 1050 which was revised from Rs 850 Initially set as part of the initial announcement.
What is the BSE Share Buyback 2023 Record Date?
The BSE Share Buyback 2023 record date is September 14, 2023.