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The Securities and Exchange Board of India (“SEBI”), through notification dated 01.07.2026, notified the SEBI (Buy-back of Securities) (Amendment) Regulations, 2026 (“Buy-back Amendment Regulations”)1 amending the SEBI (Buy-back of Securities) Regulations, 2018 (“Buy-back Regulations”). The Buy-back Amendment Regulations re-introduce the framework for open market buy-backs through stock exchanges, rationalise procedural requirements and introduce additional safeguards relating to minimum public shareholding, promoter shareholding and timelines for completion of buy-backs.
The Buy-back Amendment Regulations introduce the following:
I. Open market buy-back cap: With effect from 01.08.2026, a buy-back undertaken through the stock exchange route shall be limited to less than 15% of the aggregate of the company’s paid-up capital and free reserves, computed on the basis of both standalone and consolidated financial statements.
II. Protection of minimum public shareholding: A company shall not undertake a buy-back of shares or other specified securities if such buy back would result in a breach of the minimum public shareholding requirements prescribed under the Securities Contracts (Regulation) Rules, 1957 or the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
III. Restriction on subsequent buy-backs: A company shall not make another buy-back offer within the period prescribed under the Companies Act, 2013 (“CA 2013”) from the date of closure of its preceding buy-back offer, if any.
IV. Public announcement and shareholder intimation: In case of an open market buy-back, the company shall make the public announcement within 2 working days from the date of passing of the board resolution or, where shareholder approval is obtained by way of a special resolution through postal ballot, from the date of declaration of the postal ballot results, as applicable. Further, within 1 working day from the date of the public announcement, the company shall electronically intimate the open market buy-back offer to all persons who are shareholders of the company as on the date of the public announcement.
V. Revised timeline for open market buy-backs: With effect from 01.08.2026, every open market buy-back shall open within 4 working days from the date of the public announcement and shall close within 66 working days from the date of opening of the offer.
VI. Freeze on promoter shareholding: The Buy back Amendment Regulations require shares or other specified securities held by the promoters and promoter group that are subject to the buy back to remain frozen at the ISIN level from the date of the board resolution or special resolution, as applicable, until closure of the buy-back offer. The freeze shall not apply for the limited purpose of tendering shares in a tender offer buy-back and certain transfers pursuant to invocation of pre-existing encumbrances may continue, subject to SEBI’s conditions.
VII. Merchant banker made optional: The Buy-back Amendment Regulations introduce a new Regulation 24A, pursuant to which appointment of a merchant banker has been made discretionary. Where a company chooses not to appoint a merchant banker, various responsibilities presently discharged by the merchant banker shall instead be performed by the company, secretarial auditor, statutory auditor, stock exchange and compliance officer, as specifically allocated under the Buy-back Amendment Regulations.
The Buy-back Amendment Regulations shall come into force on 01.08.2026, except for certain amendments which are effective immediately upon notification i.e., 06.07.2026.
Footnote
1. SEBI (Buy-back of Securities) (Amendment) Regulations, 2026.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
