Should you participate in a buyback? Here are the reasons why you should

If the prospects of a company buying back shares are not as bright as they used to be, and the premium is attractive, you should tender your shares

Already very popular in the US, buybacks are now also catching on in India as a means for companies to reward their shareholders. In the first six months of 2018, as many as 28 companies announced buyback plans amounting to about Rs 213 billion, with cash-rich IT companies leading the way. This trend is likely to continue in future as well (see list of companies that have announced buyback plans here.

There are two ways through which companies can return excess cash to shareholders. The traditional way in India has been through dividends. The other route is