Announcement Effect of Open Market Share Buybacks in India: Part-II*

Dr S Narayan Rao

Associate Professor of Finance

S J M School of Management

IIT Bombay

Powai,, MUMBAI-400076, Maharashtra (India)

e-mail: narayan@som.iitb.ac.in; Ph:+91-22-25768744

On sabbatical leave at

T A Pai Management Institute

MANIPAL-576104, Karnataka (India)

e-mail: snrao@tapmi.edu.in ; Ph: +91-820-2701039

About the author

Prof S N Rao is Associate Professor of Finance at Shailesh J. Mehta School of Management, IIT Bombay. He has
been a core faculty member at UTI Institute of Capital Markets (now Indian Institute of Capital Markets), Navi
Mumbai, The Institute of Chartered Financial Analyst of India (ICFAI), Hyderabad; PSG Institute of Management,
Coimbatore; Institute of Technology and Management, Mumbai and has also been the coordinator of ICFAI Business
School, Hyderabad. His publications appeared in Journal of Financial Decisions, Eurasian Review of Economics and
Finance, Vikalpa, Decision, Finance India, ICFAI Journal of Applied Finance and other leading professional journals.
He conducted and taught in many MDPs in the area of Finance. He presented research papers in professional
international conferences held in Canada, USA, Germany, Switzerland, Malaysia, Australia and Japan. His areas of
interest include Mergers and Acquisition, Financial Engineering, Security Analysis and Portfolio Management,
Corporate Finance, and Capital Markets. He is member of International WHO’S WHO Historical Society; Marquis
WHO’s WHO; and Midwest Finance Association.

* This paper was presented at 2nd International Finance Conference held at Indian Institute of Management Calcutta,
Kolkata on 10-12 January 2011.

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 Announcement Effect of Open Market Share Buybacks in India: Part-II

ABSTRACT

Information related to share buybacks is released in two stages in India. In the first
stage information about the approval of buyback is released to stock exchanges (in
some cases through print media).In the second stage detailed information about the
buybacks is released through print media. In most of the cases, there is sizable gap
between the two stages. The first part of the study examined the effect of approval
of open market buyback through stock exchanges on stock returns. This part of the
study examines the effects of the public announcement of open market buyback
through stock exchanges in India. The sample consists of 64 open market share
buybacks announced during 2004-2010 (till June). The evidence suggests that
significant sustainable increases in firm values occur around the announcement of
share buyback. The results support information signaling hypothesis of share
buyback.

JEL classification: G35

Keywords: Announcement effect; share buyback, information signaling

1. INTRODUCTION

Firms in the USA began share buybacks in early 60s. Between 2003 and 2007, the
amount of cash spent by S&P 500 companies on buyback nearly quadrupled, from
$135 billion to $590 billion. According to the review article of Hsieh and Wang
(2009) share repurchases have surpassed cash dividends and become the dominant
form of corporate payouts since the last decade. The increased interest shown by the
repurchase program in the USA spread to Canada in the 1980s. Share repurchase
in Europe also started in the 1980s. In Asian countries buybacks were permitted in
Japan in 1995 followed by Malaysia in 1997, Singapore, Hong Kong and India in
1998, and Taiwan in 2000.

Share buyback was allowed in India through an amendment to Companies Act,

1956. There were various factors which prompted the Indian government to

2 
 
consider introducing the share buybacks. One of the factors was prolonged
depression in the stock market during 1996.Business houses and trade associations
had made a strong case for share buyback as possible solution for reviving the stock
market, because share buyback price is often higher than the prevailing market
price.

More than 300 buybacks are implemented during 1999-2009 and around $1.5 billion
is spent on the buybacks.

Objective of this study is to understand the reaction of investors to open market

buybacks through stock exchanges, by analyzing abnormal returns around the
announcement of buybacks. In India companies release the information related to
buyback in two to three stages. In the first stage information about the approval of
buyback by board/shareholders is released to stock exchanges, in the second stage
public notice (PN) about the approval is released, through print media, giving
important details of buyback (except time table of buyback) and in the third stage
public announcement (PA) containing all the details of the buyback, as prescribed in
regulations, is released through print media. In some cases, after the release of
information about the approval directly public announcement is released. As per the
regulations, companies have a period of 12 months from the date of approval of
buyback to complete the buyback process. Thus, in most of the buybacks there is
gap (in some cases long gap) between the announcement of approval of buyback and
public announcement of buyback. The first part of the study analyzed the
announcement effect of buyback approval. The results were in support of
information signaling hypothesis of share buyback.This part of the study analyses
the announcement effect of approval of open market share buybacks.

The next section covers regulatory frame work for buyback in India. Section-3
summarizes the reasons for buyback; literature review is given in section-4.
Hypothesis is stated under section-5; methodology is explained in section-6. Section-

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7 provides details on data and sample. Results are discussed in section-8 and
section-9 presents conclusions. Scope for future work is given in section-10.

2. BUYBACK REGULATIONS IN INDIA

Securities and Exchange Board of India (SEBI) announced regulatory framework

for share buybacks in November 1998. As per the regulations a company may buy-
back its shares or other specified securities by any one of the following methods:

(a) Tender offer

(b) From open market through –

(i) Stock exchanges

(ii)Book-building process

(c) From odd-lot holders.

However, open market through stock exchanges mode has emerged as the most
preferred alternative. This mode offers the companies flexibility in timing and
pricing of buybacks. All of the buybacks in recent times have been through open
market.

Other regulations are:

• The buyback should be authorized by the Articles of Association of the

company.
• The buyback should be approved with special resolution
• The sources of funds should be from the free reserves, securities premium
account, or the proceeds of any stocks or other specified securities, other than
the types of securities bought back, but should not be from borrowing for the
specific purpose.
• Only fully paid up shares are eligible for buyback.

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 • Promoters are not allowed to participate in open market buyback
• Amount used for the buyback should not exceed 10% of the total paid-up
capital and free reserves of the company
• Buyback should not be more than 25% of the paid up capital. In other words
buyback should not be more than 25% of outstanding shares.
• Post-buyback debt-equity ratio should not exceed 2:1
• The buyback has to be completed within 12 months from the date of passing
of the special resolution.
• The shares have to be extinguished and physically destroyed within 7 days
after the closure of buyback.
• Buyback cannot be affected where there is default by the company in
repayment of public deposit or interest, redemption of debentures or
preference stocks, payment of dividend, or payment of loan or interest to
financial institutions or banks.

3. REASONS FOR SHARE BUYBACK

There are number of possible reasons for share buybacks. These reasons can be
classified in the following way:

a) Information signaling: Management of company should understand the value

of their stock better than anyone outside the company. A buyback will
represent the management’s signal that the stock is undervalued.
b) Leverage: A buyback will often increase financial leverage, thus , companies
with additional debt capacity may buyback shares in order to move toward a
more desirable capital structure
c) Takeover defense: A buyback may be used as a defensive tactic in a hostile
takeover by increasing the leverage of the company, reducing the liquidity
and number of shares available to the hostile raider. A buyback also increase
relative shareholding of promoters.

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 d) Wealth transfer: A buyback that is undertaken when shares are undervalued
transfers wealth to non-participating from participating shareholders. A
buyback may also result in a wealth transfer from bondholders or creditors to
the non-participating shareholders because the increased debt used to
finance the buyback reduces the assets of the company and therefore the
value of the claims of creditors. Another aspect of wealth transfer through
buyback is from government to participating and non-participating
shareholders as buyback reduces tax impact compared to the distribution of
cash in the form of dividends.
e) Free cash flow: It is argued that management having access to ‘free cash flow’
tend to invest in businesses which destroy the wealth of shareholders. In
such situations, buyback is an efficient means of returning cash to
shareholders who can make better use of the cash than the company.
f) Earnings per share: Price-earnings ratio is a popular tool used for stock
market valuation of firms. A buyback improves earnings per share and in
turn the valuation of the firm. It also stabilizes earning per share in the
event of declining net profit.
g) Temporary Cash Flows: When a firm receives temporary cash flows and it
does not have profitable investment opportunities it has two alternatives to
distribute the cash to shareholders. If it chooses to distribute the temporary
cash flow through higher dividend, the cash distribution gets
institutionalized. The shareholders’ expectations about future dividends will
rise. Since the similar cash flows are not expected in future, firms prefer to
distribute the temporary cash flow through buyback.

These are the major reasons for share buybacks. However, it is not an exhaustive
list. Other possible reasons include savings in administrative overheads by
eliminating fractional shares and odd-lot holdings, and improving the value of stock
options held by management.

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A number of studies in the USA have endeavored to evaluate these possible reasons
for share buyback.

Objective of this study is to analyze the announcement effect of open market share
buybacks through stock exchanges in India. We hypothesize that investors perceive
buybacks as information signaling device. In other words, companies undertake
buybacks for the purpose of information signaling.

4. LITERATURE REVIEW

Since focus of this study is information signaling aspects of buyback, literature

review is confined to the studies related to buyback as information signaling.

Among all the studies conducted in the USA to provide explanation for share
buyback, information signaling has the strongest empirical support. When a
company buyback its shares, management gives an information signal to
shareholders. However, the signal may be ambiguous. On one hand, it may be that
the company has no profitable use for its funds and therefore undertakes a buyback
as a means of returning these funds to shareholder. On the other hand,
management may believe that the company is undervalued and a buyback, which is
undertaken at a significant premium above the current market price, is a means by
which management passes this information on to shareholders. Thus, to validate
buyback as information signaling, one should analyze the post buyback operating
performance.

Signaling aspect of buyback can be tested empirically. In particular, the share

prices of buyback companies can be examined in order to determine whether or not
any premium that is offered to shareholders by the company to buyback shares is
permanent. In other words, the share price permanently increases following the
buyback announcement.

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One of the most influential studies of buybacks in the USA was undertaken by
Vermaelen(1981). He examined 131 tender-offer buybacks and 243 open-market
buybacks. The average premium offered to shareholders as part of the tender offer
buyback was 23 per cent. The study attributes the positive share market reaction to
an information signaling effect whereby management undertakes a buyback to
convince investors that the shares of the company are undervalued. The study
further found that the magnitude of the premium offered to shareholders was
positively related to the percentage of outstanding shares repurchased and the
fraction of company’s shares owned by managers. This evidence is consistent with
the signaling explanation. Vermaelen also found that the confidence of managers in
the future prospects of their companies was accompanied by subsequent abnormal
earnings performance. Vermaelen argued that open-market buybacks provide less
powerful signals than tender-offer buybacks. He found that tender-offer buybacks
resulted, on average, in permanent gains to shareholders of 13 per cent. In contrast,
open-market buybacks resulted in permanent gains to shareholders of only 2
percent.

Comment and Jarrell examined 97 fixed-price tender-offer buybacks and 72 Dutch-

auction (open-market) buybacks over the period 1984-1989. They found that, on
average, Dutch-auctions resulted in an average positive return to shareholders of
7.7 percent, compared with 11.9 per cent for fixed-price buybacks. Authors also
believe that the Dutch-auctions are less informatve than fixed-price buybacks as
signals of undervaluation.

Other reasons why management may signal its expectations with buy-backs (and
also with dividends) are given by Asquith and Mullins (1986). They argue that
announcements of both dividends and share buybacks are effective signals because
they are backed by hard, cold cash.

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The information signaling explanation for buybacks also receives support from the
study of Wansley, Lane and Sarkar (1989). They conducted survey of 140 chief
financial officers of USA companies which undertook share buybacks. The
questionnaire asked the respondents to comment upon a number of possible
explanations for why their companies had undertaken share buybacks. The only
explanation for which there was significant agreement among respondents was that
the buyback was undertaken to convey management’s opinion of the company’s
present and future value.

A number of other studies have found support for the signaling explanation. In his
study, Dann(1981) found that share buybacks (tender offers) led shareholders
experiencing positive share returns of approximately 15 percent and that these
positive returns were mostly permanent in that share prices did not return to their
pre-buyback levels. He concludes with the observation “the results are consistent
with the hypothesis that repurchase tender-offer announcements constitute a
revelation by management of favorable new information about the value of the
company’s future prospects”

Hertzel and Jain found that upon a buyback announcement, financial analysts
revise their estimates of earnings forecasts for the company, further evidence
supporting signaling explanation.

Another issue related to signaling aspect of buyback is differential strength of

signals released by buyback of small companies compared to buyback of large
companies. In one of his studies, Vermaelen (1984), observed that small companies
signal more information with buybacks than do large companies when they
undertake buybacks. A subsequent study by Lakonishok and Vermaelen (1990) has
also documented that the smaller the company undertaking the buyback, the larger
the returns received by shareholders-a result consistent with the theory that small
companies signal more information than large companies when they undertake

9 
 
buybacks. Another study by Pugh and Jahera (1990) also arrives at similar
conclusion.

Studies on Canadian buybacks also report significant positive abnormal returns

around the announcement of buybacks(Schmidt, 2006). Lasfer (2002) and Rau and
Vermaelen(2002) report positive abnormal returns for buyback announcements in
the UK. Chen et al. (2004) analyze announcement effect of buybacks in Taiwan and
find significant positive announcement returns. Hatakeda and Isagawa (2004)
analyzed announcement effect for Japanese buybacks and found significant
abnormal returns surrounding the announcements. Balachandran and Faff (2004)
and Lamba and Ramsay (2005) analyzed Australian buybacks. Both the studies
document positive abnormal returns on the announcement day.

Few empirical studies were conducted in India. Studies of Mohanty (2002); Kaur
and Singh (2003); Gupta (2006); and Hyderabad (2009) reported positive abnormal
returns around the announcement of buyback. Mishra (2005) used exhaustive list of
financial parameters and performance measures to perform trend analysis of
buyback firms.

The studies carried out so far in India suffer from one or the other limitations.
Sample size of some studies is as small as 12, methodology used for estimating
expected returns was either capital asset pricing model (CAPM) or market model,
closing price is used for computing expected returns, only public announcement of
buyback was considered as an event, sample was consisting of tender offer buybacks
and open market buybacks.

This study improves upon the above limitations. Details of the improvement are
explained under ‘data and sample’ and ‘methodology’ sections.

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5. HYPOTHESIS

When a company purchases its stock, management gives an information signal to

investors. The direction of this signal is ambiguous. It may be that the company
perceives no profitable use for internally generated funds because of lack of growth
opportunities. In such cases the information signal is negative. On the other hand,
especially when a company offers to buy its shares at a substantial premium above
the market price, management may believe that their company is undervalued. The
buyback then represents an attempt to pass on the value of this inside information
to the current shareholders. In such cases the information signal is positive.

If the buybacks are perceived as positive signals, stock should experience positive
abnormal returns around the announcement of buybacks. If buybacks are perceived
as negative signals, stock should experience negative abnormal returns around the
announcement of buybacks.

This leads to my hypothesis:

H0: Average abnormal returns around the public announcement of buybacks are not
significantly different from zero.

6. METHODOLOGY

6.1 Computation of abnormal returns

The basic methodology used in this study involves computing the daily abnormal
returns for the buyback firms, around the event date. The event date is the date on
which public announcement of buyback appears in print media. The dates are
obtained from the contents of public announcement of the buyback. Event day is
indicated as ‘0’ and event period is identified as 21 days, 10 days before the event to
10 days after the event.

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Raw returns for the sample buyback firms during event period are computed as
following:

(1)

where raw return on stock i on day t, is price of stock i on day t and

P is price of stock i on day (t-1).

A time series of daily stock raw returns are computed for 21 trading days centered
around the announcement date. Unlike of other studies, daily raw returns are
computed using daily closing prices (CP) as well as daily weighted average prices
(WAP). Returns based on WAP are more representative than the same based on CP.
All stock price data is collected from the BSE website.

For computing daily abnormal returns we need daily expected returns. Different
methods are available for computing expected returns. In previous studies in India
either capital asset pricing model (CAPM) or market model are used. In these
models expected returns are computed based on premium for systematic risk only.
For these models to be appropriate, there should significant correlation between
returns on the individual stock and returns on market index (proxy for market
portfolio). In other words, market returns should be able to explain significant
proportion of risk of stock returns. According to the information available on the
website of the BSE, out of 30 BSE Sensex stocks (index of 30 most liquid stocks
listed on the BSE) only 9 have co-efficient of determination (R2) of more than 0.50.

I computed coefficient of determination (R2 ) for the sample companies using daily
returns on the stock and returns on narrow and broad based market indices (S&P
CNX 50 index and S&P CNX 500 index) during one year period ending one month
prior to the public announcement of buyback. The results are presented in
Appendix-1.For only 3 (4 in the case of broad based index) out of 64 sample
companies coefficient of determination is more than 0.50. Thus, for Indian stocks in

12 
 
general and for the sample stocks in particular, returns are not significantly
explained by market returns. Component of systematic risk is not significantly
high.

Therefore, in this study two alternative methods are used to compute expected
returns. In case-1 daily returns on market portfolio is assumed as expected returns
on the stock and in case-2 daily average returns on the stock during one year period
ending one month prior to the approval of the buyback is considered as fair estimate
of expected returns on the stock. The S&P CNX 500 index is used as proxy for
market portfolio, and the values of the index are collected from the NSE website.
Index returns are also computed based on daily closing price as well as daily
average price (average of day’s high and low prices, as daily weighted average is not
available for the index).Thus,

(2)

where, ARit is abnormal return on stock i for day t, is raw return on stock i for
day t, and is expected return on stock i for day t. Expected returns on stock
is estimated under two cases as given below:

Case-1: return on the S&P CNX 500 index for day t is considered as the expected
return for the stock, and

Case-2: average daily logarithmic return on the stock during one year period
ending one month prior to the approval of buyback is considered as the expected
return.

The daily average abnormal return (AAR) for the sample is computed as:

∑ (3)

where n is the number of firms in the sample. This cross-sectional mean abnormal
return can be interpreted as the return on an equally-weighted portfolio of the
sample companies.

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A desirable feature of using a cross-sectional mean abnormal return relative to a
common event is that averaging across many observations mitigates the influence of
other firm specific or market-wide effects that are unrelated to the share buyback
announcement. However, relying exclusively on a cross-sectional mean or portfolio
return can obscure important price impacts if the predicted impacts are of opposite
sign for a subset of the sample observations. Since this possibility is suggested by
the information disclosure hypothesis, the number of positive and negative
abnormal returns for each day are also reported. Observing the proportion of
positive abnormal returns in conjunction with the mean abnormal return provides
additional evidence regarding the uniformity of price impacts across the sample.

Cumulative average abnormal return (CAAR) is computed as:

∑ (4)

where, -d and + d represent the event period which is -10 to +10 days. Observation
of CAARs over the event period will tell us whether the effect of the announcement
is temporary are sustainable.

6.2 Significance test

To test whether daily average abnormal returns are statistically different from 0,

t-statistic is computed as:

(5)
√

where, is standard deviation of abnormal returns of sample firms on day t.

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7. DATA AND SAMPLE

Sources of data for this study are websites of the SEBI (www.sebi.gov.in), the
Bombay Stock Exchange (BSE, www.bseindia.com), the National Stock Exchange
(NSE, www.nseindia.com). Documents related to buybacks (public notice, public
announcement, corrigendum/addendum to public announcement, post-buy back
announcement) are collected from the website of the SEBI. These documents are
available on the website for the buybacks announced in 2004 onwards. Thus the
study period is 2004-2010 (till June). At least one of the documents is available for
79 open market buybacks through stock exchanges) approved during the period.
According to the information available on the website of the BSE, there were 130
open market buybacks during 2001-2009 (based on the opening date of buybacks).
But the documents related to all these buybacks are not available on the SEBI
website and the BSE information does not have details of approval date.

Unlike other studies on buybacks in India, sample of this study consists of only
open market buybacks through stock exchanges. As reported in literature review,
information signaling strength varies based on the type of buyback. In tender offer
buybacks management announces the specific number of shares it wants to
repurchase, the specific offer period (which has to be between 15-30 days), and the
single price the company will pay for all the shares bought back. In contrast, in
open market buybacks through stock exchanges management announces the
maximum buyback price, maximum amount allocated for buyback program,
minimum number of shares to be bought back (assuming that all the shares are
bought at maximum price and amount allocated for buyback is used fully), offer
period (it is relatively longer, but has to be less than one year from the date of
approval of buyback). Average price paid for buyback is generally lower than the
maximum price indicated in the announcement. Actual amount used for buyback is
generally less than the maximum amount allocated for buyback. The board has the
right to terminate buyback before the announced closing date. In tender offer
buybacks tendering shareholders surrender shares directly to company, whereas, in

15 
 
open market buybacks the purchases are executed through brokers at the
prevailing market price. In open market buybacks, company gets flexibility in the
implementation of buyback in terms of timing and pricing. Thus, the impact of open
market buybacks found to be less than that for tender offer buybacks.

Of 79 open market buybacks identified above, the following criteria are used to
include a buyback in to the final sample:

i) Stock prices should be available on the BSE website for 11 days before the
approval day to 10 days after the approval day.
ii) The date of buyback approval is available in one of the documents
available on SEBI website.

These additional requirements reduce the final sample to 64 open market buybacks
through stock exchanges (made by 59 different companies) for analysis of the effect
of approval of buybacks. List of the sample firms is given in Appendix-2.

Table-1 presents the distribution of the final sample across the calendar years.

Table-1 about here

Years 2008 and 2009 account for more than 60% of the sample buyback
announcements. According to information available on the BSE website total
number of buybacks during 2008 and 2009 were 30 and 36, respectively. The
significant increase in buybacks during 2008 and 2009 can be attributed to the
global meltdown. It seems management of Indian companies was good at timing of
buybacks in 2008 by launching them when the markets bottomed. The S&P CNX
500 lost 57% during the calendar year 2008. The timing was not correct for
buybacks in 2009. The S&P CNX 500 gained 84% during the calendar year 2009. (in
the USA, S&P 500 companies spent record $589 billion on buybacks in 2007;
subsequently S&P 500 index was down by 38.5% in 2008. Another case of bad
timing of buybacks by the USA companies was in 2000 when they loaded up on
buybacks, just before the burst of IT bubble which lasted until 2002).

16 
 
Summary statistics describing the characteristics of the sample of open market
buybacks through stock exchanges is presented in table-2. The premium offered,
relative to closing price one day prior to buyback announcement day is sizable.
Buyback price is on average 46.86% higher than the closing price on the day
preceding buyback announcement. The range of premium is 275% to -1.80%.
Table-2 about here

Three day (-1 to + 1 day, 0 being the announcement day) average abnormal return for the
sample is 3.78% (for returns based on closing price) and 4.43% (for returns based on
weighted average price) for the case where returns on the index is considered as expected
return on the stock. The same in the case where average daily returns on the stock during
one year period ending one month prior to the date of buyback announcement are 4.55%
and 4.57%, respectively. All of these abnormal returns are significantly different from zero
at 0.01 level and above. Varying degrees of positive skewness exist in the distribution of
each of these parameters, but the medians of these distributions are of same general
magnitude as means for most of the parameters. Clearly, buybacks are significant events in
the lives of the corporations which undertake them.

Post-buyback public announcement document is available for 22 of 64 sample buybacks.

This buyback document provides information like average price paid, actual opening date,
actual closing date, amount utilized for buyback, number of shares bought back.etc..

Characteristics of the sub-sample of the above 22 buybacks are as follows:

• Six buybacks delayed opening of buyback, on average , by 6,25 days
• Five buybacks closed early, on average, by 180 days
• Average buyback period is 202 days
• Target buyback was 5.58% of outstanding shares, actual is 3.89%
• Average buyback price is 29.41% discount to stated maximum buyback price

17 
 
 • Average buyback price is 3.4% above the price on one day prior to the approval of
buyback
• Average amount utilized for buyback is 55.72% of the amount allocated.

Table-3 presents reasons for buyback, as stated by the sample buyback companies in the
public announcement document.

Table-3 about here

As per the regulations governing share buybacks in India, buyback companies are
required to give the reasons for the buyback. Number reason given by the sample
buyback companies varies from three to five. As given in table-3, all of the sample
companies given the reason ‘to improve EPS, RONW, and overall shareholder value’
for buyback, around half of the sample companies stated ‘to utilize surplus funds’
and ‘to provide exit route without adverse impact on price’ as additional reasons.
Four of the sample companies stated ‘to reflect confidence of management in future
prospects’ and only two of the sample companies stated ’to signal undervaluation of
stock’ among the reasons for buyback. If investors accept the first reason of
improving EPS, RONW, and shareholder value through buyback (and also reasons 4
and five); we expect positive effect of buyback on stock prices of buyback companies.
Thus, information signaling theory is suitable for empirical testing on this sample.

Announcement days are spread across the days of the week. Table-4 presents the
distribution of the sample by the day of announcement. Only 8% of the approval
announcements are made at the beginning of the week (Mondays) and 16% on the
weekend (Fridays).

Table-4 about here

Thus, the returns of the sample firms are not affected by temporal anomalies.

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8. RESULTS

8.1 Effect the Announcement of Buyback for Case-1 where the S&P CNX 500 index
return is considered as expected return on the sample stocks

Table-5 presents time series of average abnormal returns around date of buyback
approval for the sample of 64 open market buybacks through stock exchanges.
These abnormal returns are excess returns over the returns on the S&P CNX 500
index. Column 1 identifies the trading day relative to day 0 (approval day). Results
under columns 2-6 are related to the case of closing price based return computation.
Column-2 presents daily average abnormal return (AAR) , column 3 reports the
number(percentage) of those abnormal returns which are positive. Column 4 reports
cumulative average abnormal return (CAAR). Column 5 reports the cross-sectional
standard deviation of the daily abnormal returns for each trading day and t-statistic
is reported under column 6. Similar results for the case of weighted average price
based return computation are presented under columns 7-11.

Table-5 about here

In the case of closing price based returns, trading days -8, and -1 reported AAR of
1.07% and 1.75%, respectively. These returns are statistically significant at levels
0.05 and above. The positive AARs for these days are further supported by majority
of positive abnormal returns of individual securities. Significant positive abnormal
returns for day -8 can be attributed to the overlapping windows of approval of
buybacks and the announcement of buybacks. Significant positive abnormal return
for day -1 can be because of availability of information through electronic media a
day before it is announced through print media. The over-reaction to the
information seems to have been corrected on day +4 which reported significant
negative AAR of 0.96%. Overall cumulative average abnormal returns (CAARs) for
the window of 21 trading days around the announcement of buyback is 4.84%

19 
 
Similar results are reported for the case of weighted average price based returns,
except that there are no significant abnormal returns for day -8 but day 0 reported
significant abnormal returns. Trading days -1 and -0 reported significant positive
AARs of 1.72% and 1.89%, respectively. The initial overreaction to the
announcement seems to have corrected on +4 which reported significant negative
AARs of 0.91%. Overall cumulative average abnormal returns (CAARs) for the
window of 21 trading days around the announcement of buyback approval is 4.70%

Lamba and Ramsay (2005) also obtained significant positive AARs of 0.495%,
0.412% and 0.594% for trading days -5 and -4 and -1, respectively. Their study also
obtained significant negative AARs of 1.649% and 0.560% for the trading days +4
and +5, respectively.

In addition, three day announcement period (-1,0,and +1 trading days) cumulative

average abnormal returns (CAARs) are computed. This period is expected to
capture ‘early reaction’, timely reaction’ and ‘delayed reaction’ to the announcement.
For the case of closing price based returns the three day CAAR is 2.7% and for the
case of weighted average price based returns it is 3.49% (see table-7). Both the
returns are statistically significant. These returns are comparable to 3.29%
obtained by Lamba and Ramsay (2005).

Figure-1 portrays the cumulative average abnormal returns (CAARs) graphically

for closing price based returns and for weighted average price based returns. The
CAAR is presented to demonstrate that the announcement impact is not a
‘temporary’ price response. While there has been over-reaction and correction, the
announcement of buyback approval has created CAAR of 4.84% (for closing price
based returns) and 4.70% ( for weighted average price based returns) over the
period of 21 trading days around the announcement of buyback approval.

Fig-1 about here

20 
 
Positive average abnormal returns resulting from the public announcement of
buyback are apparently consistent with information effect. Investors perceive the
announcement as positive information. Thus, the null hypothesis (H0) about the
effect of announcement of buyback approval is rejected.

8.2 Effect the Public Announcement of Buyback for Case-2 where average daily
logarithmic returns on the sample stocks during one year period ending one month
prior to the announcement of buyback is considered as expected return on the
sample stocks

Table-6 presents time series of average abnormal returns around date of buyback
announcement for the sample of 64 open market buybacks through stock exchanges.
These abnormal returns are excess returns over average daily logarithmic returns
during one year period ending one month prior to the announcement of buyback.

Table-6 about here

In the case of closing price based returns, trading days -1 and +1 reported AAR of
1.95% and 1.37%, respectively. These returns are statistically significant at levels
0.05 and above. The positive AARs for these days are further supported by majority
of positive abnormal returns of individual securities. The over-reaction seems to
have been corrected on +4 and +6 days which reported negative AAR of 0.87% and
0.80 % (significant at 0.05 levels). Overall cumulative average abnormal returns
(CAARs) for the window of 21 trading days around the announcement of buyback
approval is 9.50%.

Similar results are reported for the case of weighted average price based returns.
Trading days -1 and 0 reported significant positive AARs of 1.89% and 1.55%,
respectively. The initial overreaction to the announcement seems to have corrected
on +4 day which reported significant negative AARs of 0.97%. Overall cumulative

21 
 
average abnormal returns (CAARs) for the window of 21 trading days around the
announcement of buyback is 9.90%.

In addition, three day announcement period (-1,0,and +1 trading days) CAARs are
computed. For the case of closing price based returns the three day CAARs is 4.55%
and for the case of weighted average price based returns it is 4.57% (see table-7).
Both the returns are statistically significant.

Table-7 about here

Figure-2 portrays the cumulative average abnormal returns (CAARs) graphically

for closing price based returns and for weighted average price based returns,
respectively. The CAAR is presented to demonstrate that the announcement impact
is not a ‘temporary’ price response. While there has been over-reaction and
correction, the announcement of buyback has created CAAR of 9.50% (for closing
price based returns) and 9.90% ( for weighted average price based returns) over the
period of 21 trading days around the announcement of buyback announcement.

Fig-2 about here

Positive average abnormal returns resulting from the announcement of buyback are
apparently consistent with information effect. Investors perceive the announcement
as positive information. Thus, the null hypothesis (H0) about the effect of
announcement of buyback approval is rejected even in the case where historical
daily returns are considered as expected returns.

22 
 
9. CONCLUSIONS

The objective of this study is to analyze the announcement effect of open market
share buybacks.

This study finds evidence of significant effect of the public announcement of

buyback on the stock returns. It is also found that the positive effect of the
announcements is sustained.

Based on the evidence, it can be concluded that investors apparently perceive

buybacks as positive signal. The results are consistent with information signaling
hypothesis of share buybacks.

10. FUTURE WORK

As continuation of the study, future work will include addressing the following
questions related to open market share buybacks:

• What is the wealth effect of the share buybacks? How the wealth created by
the share buyback is distributed between tendering and non-tendering
shareholders?
• If the share buyback is used as information signaling device (alternatively, if
the share buyback is perceived as information signal by investors), is the
signal credible? Does the operating performance of buyback firms improve
significantly?
• Does the long-term stock market performance of the buyback firms is
significantly different from non-buyback firms?
• Is the improvement in operating and stock-market performance of the
buyback firms is driven by pre-buyback downward earnings management?

As of now, none of the studies on Indian share buybacks have looked into the above
aspects of share buyback.

23 
 
 Table‐1: Sample distribution by year 
   N  Fraction (%) 
2004  5  8 
2005  5                 8 
2006  4                 6 
2007  4                 6 
2008  13               20 
2009  28               44 
2010*  5                 8 
 Total  64  100 
*till June

Table‐2: Summary statistics for characteristics of the sample 
Characteristic  Mean  Median  High  Low 
Buyback premium relative to closing price             
one day prior to public announcement   46.86% 33.74%  275.00% ‐1.80%
 
Min.percentage of outstanding to be bought back  6.22% 4.89%  25% 0.17%
 
Maximum amount allocated for buyback (Rs. Million)  1113.49 213.50  11000.00 5.56
 
Pre‐buyback promoters' holding  48.66% 48.65%  88.16% 2.77%
 
Post‐buyback promoters' holding  51.73% 53.69%  88.50% 2.93%
 
Three day (‐1,0,+1)CP based CAAR1   3.78%**  2.42%  58.16% ‐18.23%
 
Three day (‐1,0,+1) WAP based CAAR1  4.43%**  3.03%  38.45% ‐17.82%
 
Three day  (‐1,0,+1) CP based CAAR2  4.55%***  3.11%  60.00% ‐21.00%
 
Three day WAP based CAAR2   4.57%***  3.17%  59.40% ‐19.51%
           
CP: closing price; WAP: weighted average price 
CAAR: cumulative average abnormal return 
1
for the case where return on the S&P CNX 500 index is considered as expected return on the stock 
2
for the case where average daily return on the stock during one year period ending one month prior to the approval or 
buyback is considered as expected return on the stock. 
** significantly different from zero at 0.01 level; *** significantly different from zero  at 0.005 level 

24 
 
 Table‐3: Reasons for Buyback 
Reason  Frequency    
1. To improve EPS, RONW,        
and overall shareholder value  64 

2. To utilize surplus funds  34 

3.To provide exit route without 
adverse impact on price  33 

4.To reflect confidence of 
management in future prospects  4 

5. To signal undervaluation of stock  2    

 
Table‐4: Sample distribution by the day of announcement 
Day  Frequency  Percentage 
Sat & Sun  13  20 
Mon  5  8 
Tue  11  17 
Wed  9  14 
Thu  16  25 
Fri  10  16 
Total  64  100 

25 
 
 Table‐5: Announcement Effect the Public Announcement of Buybacks 
Case‐1: AARs are computed as excess returns over returns on the S&P CNX 500 index 
   Closing Price (CP)  Based Returns (N=64)       Weighted Average Price (WAP)  Based Returns (N=64) 
Day  AAR  Positive ARs (%)  CAAR  SD  t‐value     AAR  Positive ARs (%)  CAAR  SD  t‐value 
‐10  0.34%  29 (45)  0.34%  4.54%  0.594  ‐0.17%  28(44)  ‐0.17%  4.16%  ‐0.321 
‐9  ‐0.26%  31(48)  0.07%  3.87%  ‐0.545  ‐0.01%  34(53)  ‐0.17%  4.09%  ‐0.015 
‐8  1.07%*  37(58)  1.14%  3.78%  2.259  1.01%  36(56)  0.84%  4.29%  1.888 
‐7  ‐0.25%  27(42)  0.89%  3.64%  ‐0.558  0.48%  28(44)  1.32%  3.54%  1.093 
‐6  ‐0.04%  26(41)  0.84%  3.71%  ‐0.089  ‐0.31%  25(39)  1.02%  3.50%  ‐0.700 
‐5  ‐0.03%  30(47)  0.81%  4.26%  ‐0.065  ‐0.34%  30(47)  0.67%  3.89%  ‐0.707 
‐4  0.54%  28(44)  1.35%  3.87%  1.118  0.36%  27(42)  1.04%  3.37%  0.863 
‐3  ‐0.51%  28(44)  0.85%  4.33%  ‐0.934  ‐0.69%  28(44)  0.35%  3.44%  ‐1.600 
‐2  0.38%  35(55)  1.23%  4.09%  0.747  ‐0.05%  25(39)  0.30%  3.70%  ‐0.098 
‐1  1.75%**  35(55)  2.97%  5.74%  2.435  1.72%***  37(58)  2.02%  5.16%  2.664 
0  1.16%  37(58)  4.13%  5.58%  1.660  1.89%*  40(63)  3.91%  6.58%  2.296 
1  0.87%  34(53)  5.01%  4.82%  1.452  0.83%  37(58)  4.74%  4.83%  1.374 
2  0.36%  36(56)  5.36%  3.79%  0.757  0.29%  33(52)  5.03%  3.66%  0.639 
3  0.48%  28(44)  5.84%  4.68%  0.817  0.19%  28(44)  5.22%  4.89%  0.312 
4  ‐0.96%**  22(34)  4.88%  2.95%  ‐2.607  ‐0.91%****  20(31)  4.31%  2.92%  ‐2.498 
5  0.41%  30(47)  5.29%  2.72%  1.216  0.22%  30(47)  4.53%  2.25%  0.777 
6  ‐0.07%  30(47)  5.22%  2.77%  ‐0.209  0.38%  35(37)  4.91%  3.13%  0.977 
7  ‐0.72%  25(39)  4.50%  3.93%  ‐1.471  ‐0.61%  24(38)  4.30%  3.92%  ‐1.238 
8  0.29%  30(47)  4.79%  3.78%  0.609  0.22%  30(47)  4.52%  3.27%  0.534 
9  0.52%  36(56)  5.31%  2.68%  1.557  0.32%  33(52)  4.84%  3.52%  0.722 
10  ‐0.47%  29(45)  4.84%  3.68%  ‐1.012     ‐0.14%  28(44)  4.70%  3.30%  ‐0.336 
AAR: average abnormal return; AR: abnormal return; CAARs: cumulative average abnormal returns; SD: standard deviation of abnormal returns 

* significant at 0.05 level: ** significant at 0.*02 level; *** significant at 0.01 level  (all two‐tailed tests) 

26 
 
 Effect of public announcement of share baback
Case‐1: Market returns are considered as expected returns
7.00%

6.00%

5.00%

4.00%
CAAR

3.00%
CP based returns
WAP based returns
2.00%

1.00%

0.00%
‐10 ‐9 ‐8 ‐7 ‐6 ‐5 ‐4 ‐3 ‐2 ‐1 0 1 2 3 4 5 6 7 8 9 10

‐1.00%
Trading Day

CP: closing price; WAP: weighted average price; CAAR: cumulative average abnormal returns

Figure-1

27 
 
 Table‐6: Announcement Effect the Public Announcement of Buybacks 
Case‐2: Average daily logarithmic returns on the stock during one year period ending one month prior to the  
public announcement of buyback is considered as expected return  
   Closing Price (CP)  Based Returns (N=64)       Weighted Average Price (WAP)  Based Returns (N=64) 
Day  AAR  Positive ARs (%)  CAAR  SD  t‐value    AAR  Positive ARs (%)  CAAR  SD  t‐value 
‐10  0.88%  36 (57)  0.88%  4.54%  1.551  0.58%  34 (53)  0.58%  4.15%  1.110 
‐9  ‐0.51%  24 (38)  0.37%  3.91%  ‐1.043  0.10%  33 (52)  0.68%  4.37%  0.185 
‐8  0.87%  37 (59)  1.24%  3.94%  1.775  0.84%  30 (47)  1.52%  4.71%  1.429 
‐7  ‐0.39%  26 (41)  0.86%  4.64%  ‐0.664  0.40%  30 (47)  1.92%  4.08%  0.794 
‐6  0.63%  36 (57)  1.49%  4.02%  1.258  0.16%  32 (50)  2.09%  3.64%  0.359 
‐5  ‐0.02%  30 (48)  1.47%  4.30%  ‐0.044  ‐0.29%  28 (44)  1.80%  3.84%  ‐0.601 
‐4  0.44%  30 (48)  1.91%  4.01%  0.884  0.50%  27 (42)  2.30%  3.59%  1.113 
‐3  ‐0.29%  24 (38)  1.62%  4.69%  ‐0.491  ‐0.15%  32 (50)  2.15%  4.56%  ‐0.256 
‐2  0.88%  32 (51)  2.51%  4.81%  1.472  0.53%  30 (47)  2.68%  4.15%  1.012 
‐1  1.95%**  39 (62)  4.45%  6.06%  2.567  1.89%** 40 (63)  4.56%  5.74%  2.630 
0  1.23%  41 (65)  5.69%  5.88%  1.680  1.55%*  40 (63)  6.12%  6.18%  2.010 
1  1.37%*  35 (56)  7.05%  4.73%  2.312  1.13%  32 (50)  7.25%  4.74%  1.907 
2  0.97%  37 (59)  8.02%  4.20%  1.849  0.70%  25 (39)  7.95%  4.08%  1.375 
3  0.45%  31 (49)  8.47%  4.76%  0.752  0.38%  28 (38)  8.33%  5.35%  0.566 
4  ‐0.87%*  26 (41)  7.60%  3.34%  ‐2.090  ‐0.97%*  26 (41)  7.36%  3.42%  ‐2.259 
5  0.49%  30 (48)  8.09%  3.44%  1.140  0.27%  32 (50)  7.63%  2.79%  0.764 
6  0.80%*  37 (59)  8.89%  3.14%  2.034  0.77%  36 (56)  8.39%  3.56%  1.723 
7  ‐0.35%  26 (41)  8.54%  3.65%  ‐0.759  0.04%  31 (48)  8.43%  3.85%  0.078 
8  0.73%  33 (52)  9.27%  4.01%  1.461  0.57%  41 (64)  9.00%  3.40%  1.338 
9  0.68%  36 (57)  9.95%  2.88%  1.884  0.89%  36 (56)  9.89%  3.56%  1.991 
10  ‐0.45%  32 (51)  9.50%  3.82%  ‐0.948    0.02%  35 (55)  9.90%  2.69%  0.054 
CP: closing price;  WAP: weighted average price AAR: average abnormal return; AR: abnormal return; CAARs: cumulative average abnormal returns;  

SD: standard deviation of abnormal returns ;* significant at 0.05 level: ** significant at 0.02 level (all two‐tailed tests) 

28 
 
 Effect of public announcement of share buybacks
CAse‐2: Historical returns are considered as expected returns
12.00%

10.00%

8.00%
CAAR

6.00%
CP based returns
WAP based returrns
4.00%

2.00%

0.00%
‐10 ‐9 ‐8 ‐7 ‐6 ‐5 ‐4 ‐3 ‐2 ‐1 0 1 2 3 4 5 6 7 8 9 10
Trading Day

CP: closing price; WAP: weighted average price; CAAR: cumulative average abnormal returns

Figure-2

29 
 
 Table‐7: Three day (‐1 to +1 days) cumulative average abnormal returns 
(CAARs) 
   Return  SD  t‐value 
For the case where the S&P CNX 500 returns  are taken as benchmark returns 
Closing price based returns  2.7%**  7.90% 2.798
Weighted average price based returns  3.49%****  8.15% 3.426

For the case where average daily returns during one year period ending  
one month prior to buyback approval taken as bench mark returns 
Closing price based returns  4.55%***  11.91% 3.054
Weighted average price based returns  4.57%***  12.48% 2.929
** significant at 0.01 level; *** significant at 0.005 level ; ****significant at 0.001 level(all two-tailed tests)

30 
 
 Appendix‐1: Betas and R‐squares values  for the Sample Companies which have 
       undertaken open market buybacks through stock exchanges 
S No  Company  Beta1  R‐Square1  Beta2  R‐square2 
1   Britania Industries Ltd  0.24 0.06 0.09  0.01 
2  Solitaire Machine tools Ltd  ‐0.21 0.001 ‐0.12  0.008 
3  Mastek Ltd (1)  1.23 0.17 0.92  0.1 
4   Godrej Consumer Products Ltd (1)  0.42 0.068 0.15  0.008 
5   Reliance Industries Ltd  1.09 0.7 0.11  0.01 
6  DIL Ltd  0.88 0.23 0.93  0.27 
7  Polaris Software Lab Ltd  1.35 0.57 1.34  0.58 
8  Berger Paints Ltd  0.51 0.01 0.56  0.01 
9  Godrej Consumer Products Ltd (2)  0.23 0.05 0.23  0.05 
10  Indiabulls Financial Servicdes Ltd  1.42 0.11 1.57  0.13 
11  SRF Ltd (1)  1.78 0.36 2.02  0.42 
12  Revathi Equipments Ltd  0.67 0.16 0.8  0.21 
13  Natco Pharma Ltd  0.57 0.14 0.64  0.17 
14  Carol Info Services Ltd  0.74 0.13 0.89  0.18 
15  ACE Software Exports  Ltd  0.63 0.07 0.72  0.09 
16  Gujarat Ambuja Exports Ltd  0.75 0.12 0.84  0.15 
17  MRO Tek Ltd (1)  1.32 0.32 1.47  0.38 
18  Hindustal Unilever Ltd  ‐0.09 0.004 ‐0.09  0.004 
19  Mastek Ltd (2)  0.51 0.12 0.53  0.14 
20   Patni Computer Systems Ltd  0.08 0.002 0.11  0.005 
21  Madras Cements Ltd  0.68 0.24 0.75  0.27 
22  Great Offshore Ltd  0.98 0.36 1.06  0.43 
23  Sasken Communication Tech Ltd  1.19 0.32 1.3  0.39 
24  SRF Ltd (2)  1.04 0.33 1.5  0.42 
25  DLF  Ltd  1.45 0.61 1.46  0.63 
26  Gateway Distriparks Ltd  ‐0.03 0.0003 ‐0.3  0.0003 
27  Gujarat Florochemicals Ltd  ‐0.12 0.0026 ‐0.08  0.0013 
28  Surana Telecom and Power Ltd  0.85 0.21 0.96  0.28 
29  Ipca Lab Ltd  0.23 0.07 0.24  0.08 
30  Suprme Industries Ltd  0.66 0.22 0.72  0.26 
31  EID Parry Ltd  0.48 0.0025 0.42  0.009 
32  Hydro S&S Industries Ltd  0.56 0.08 0.66  0.11 
33  TTK Health Care Ltd  0.14 0.01 0.26  0.07 
34  TV Today Network Ltd  0.85 0.3 0.96  0.35 
35  Zen Technologies Ltd  0.45 0.07 0.86  0.24 
36  Sandesh Ltd Ltd  ‐0.09 0.004 0.18  0.029 
37  Gitanjali Gems Ltd  0.87 0.29 0.97  0.32 

31 
 
 38  Godrej Industries Ltd  1.18 0.08 2.33  0.78 
39  Selan Exploration Ltd  0.85 0.2 0.96  0.24 
40  Austin Engineering Co. Ltd  0.67 0.24 0.73  0.27 
41  Mangalam Cements Ltd  0.73 0.33 0.8  0.38 
42  Kilburn Engineering Ltd  0.83 0.25 1.01  0.18 
43  LKP Finance Ltd  0.25 0.03 0.65  0.18 
44  MRO Tek Ltd (2)  1.05 0.37 1.17  0.41 
45  GSS America Infotech Ltd  1.05 0.24 1.13  0.25 
46  Apollo Tyres Ltd  0.59 0.25 0.66  0.29 
47  India Bulls Securities Ltd  0.91 0.26 1.05  0.98 
48  Pennar Industries Ltd  0.02 0.0002 0.58  0.27 
49  Dai‐Ichi Karkaria Ltd  0.04 0.009 0.06  0.082 
50  Avantel Ltd   0.32 0.03 0.83  0.39 
51  Merck Ltd  0.26 0.17 0.29  0.19 
52  Deccan Chronicle Holdings Ltd  1.07 0.36 1.2  0.4 
53  Jindal Polyfilms Ltd  0.46 0.13 0.53  0.15 
54  Provogue India Ltd  0.51 0.12 0.6  0.15 
55  SRF Ltd (3)  0.57 0.26 0.67  0.32 
56  Bhagyanagar India Ltd  0.51 0.11 0.83  0.27 
57  Poddar Pigments Ltd  0.15 0.01 0.49  0.07 
58  Goldiam International Ltd  0.64 0.17 0.75  0.2 
59  Apcotex Industries Ltd  0.05 0.001 0.4  0.004 
60  FDC Ltd  0.22 0.01 1.08  0.74 
61  TIPS Industries Ltd  0.23 0.01 0.82  0.15 
62  Manaksia Ltd  0.53 0.06 0.89  0.16 
63  Panacea Ltd  0.42 0.03 0.72  0.14 
64  Geodesic Ltd  0.98 0.12 0.97  0.49 

Beta1 : Value of beta  with S&P CNX 50 Index as market portfolio 
R‐square1 : Value of R‐square with S&P CNX 50  Index as market portfolio 
Beta2 : Value of beta with S&P CNX 500 Index  as market portfolio 
R‐square2 : value of R‐square with S&P CNX 500  Index as market portfolio 
AR: average daily returns   
The above values are computed using daily  logarithmic returns for one year period  
ending one month prior to the public announcement of buyback. 

32 
 
 Appendix‐2: List of Sample Companies which have undertaken 
open market buybacks through stock exchanges 
Year of Public 
S No  Company  Announcement 
1   Britania Industries Ltd  2004
2  Solitaire Machine tools Ltd  2004
3  Mastek Ltd (1)  2004
4   Godrej Consumer Products Ltd (1)  2004
5   Reliance Industries Ltd  2004
6  DIL Ltd  2005
7  Polaris Software Lab Ltd  2005
8  Berger Paints Ltd  2005
9  Godrej Consumer Products Ltd (2)  2005
10  Indiabulls Financial Servicdes Ltd  2005
11  SRF Ltd (1)  2006
12  Revathi Equipments Ltd  2006
13  Natco Pharma Ltd  2006
14  Carol Info Services Ltd  2006
15  ACE Software Exports  Ltd  2007
16  Gujarat Ambuja Exports Ltd  2007
17  MRO Tek Ltd (1)  2007
18  Hindustal Unilever Ltd  2007
19  Mastek Ltd (2)  2008
20   Patni Computer Systems Ltd  2008
21  Madras Cements Ltd  2008
22  Great Offshore Ltd  2008
23  Sasken Communication Tech Ltd  2008
24  SRF Ltd (2)  2008
25  DLF  Ltd  2008
26  Gateway Distriparks Ltd  2008
27  Gujarat Florochemicals Ltd  2008
28  Surana Telecom and Power Ltd  2008
29  IPCA Lab Ltd  2008
30  Suprme Industries Ltd  2008
31  EID Parry Ltd  2008
32  Hydro S&S Ltd  2009
33  TTK Health Care Ltd  2009
34  TV Today Network Ltd  2009
35  Zen Technologies Ltd  2009
36  Sandesh Ltd Ltd  2009
37  Gitanjali Gems Ltd  2009

33 
 
 38  Godrej Industries Ltd  2009
39  Selan Exploration Ltd  2009
40  Austin Engineering Co. Ltd  2009
41  Mangalam Cements Ltd  2009
42  Kilburn Engineering Ltd  2009
43  LKP Finance Ltd  2009
44  MRO Tek Ltd (2)  2009
45  GSS America Infotech Ltd  2009
46  Apollo Tyres Ltd  2009
47  India Bulls Securities Ltd  2009
48  Pennar Industries Ltd  2009
49  Dai‐Ichi Karkaria Ltd  2009
50  Avantel Ltd   2009
51  Merck Ltd  2009
52  Deccan Chronicle Holdings Ltd  2009
53  Jindal Polyfilms Ltd  2009
54  Provogue India Ltd  2009
55  SRF Ltd (3)  2009
56  Bhagyanagar India Ltd  2009
57  Poddar Pigments Ltd  2009
58  Goldiam International Ltd  2009
59  Apcotex Industries Ltd  2009
60  FDC Ltd  2010
61  TIPS Industries Ltd  2010
62  Manaksia Ltd  2010
63  Panacea Ltd  2010
64  Geodesic Ltd  2010

34 
 
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36