The concept of buyback was introduced in the 1960s in the US and remained popular in the 1980s. Even today, buyback of shares in practiced frequently in the US and other countries. In India, share buyback was first introduced in 1998 by the Securities and Exchange Board of India (SEBI) under Section 77A of the Companies Act, 1956. The introduction of buyback around the world has put pressure on the Indian corporate sector to allow them to buyback shares so that they can also use their internal surplus cash. The Bombay Stock Exchange (BSE) defines buyback as: 'a caproate action in which a company buys back its shares from the existing shareholders usually at a price higher than market price' . There are numerous reasons for buyback like achieving capital structure, improving certain financial ratios, etc.
