Open repurchase announcements and abnormal returns of Indian firms: An industry-wise analysis

Although the tender offer buyback method has gained significance over time, many companies still prefer open market repurchases. The existing literature focuses mainly on impact of announcements, specifically stock returns; however, announcements and abnormal returns in case repurchases have not yet been studied detail, especially across industries Indian context. This study, therefore, attempts to analyze repurchase firms. To that end, event study methodology used for a period 31 days, i.e. 15 days prior after announcement filtered sample 100 firms during 2010–2020. results indicate were more favorable short run. findings do support undervaluation rationale behind statement. low-profit opportunities window convey investors’ predictions about announcement. In context industries, manufacturing sector seemed be far better than IT & telecom, chemical, pharma as statistically significant five (5) out days. industry-specific also suggest profit are majorly pre-announcement phase. overall corroborate share might irrelevant shareholders’ wealth. Therefore, buybacks may decisions related capital structure changes. AcknowledgmentThe infrastructural provided by FORE School Management, New Delhi completing this paper is gratefully acknowledged.