Does Share Repurchase Announcement Lead to Rise in Share Price? Evidence from India
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BANIK, ARINDAM GLOBAL BUSINESS REVIEWSummary: In recent years, there is an increasing trend of share repurchase announcement by Indian firms. This article attempts to examine whether open market share repurchase announcements in India lead to excess stock returns and to identify the factors responsible for additional stock returns. Apart from a standard market method, the price behaviour is examined on an individual basis. The results show that the firms, on an average, do not experience price improvement after share repurchase. While 24 per cent of the firms lose and 10 per cent gain, the rest experience no change. In normal times, investors prefer small-cap companies, but post-announcement, promoters’ share and premium play an important role.
| Item type | Current library | Call number | Vol info | Status | Notes | Date due | Barcode | Item holds | |
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Journal Article
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Main Library | Vol 20, No 2/ 55510427JA9 (Browse shelf(Opens below)) | Available | 55510427JA9 | |||||
Journals and Periodicals
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Main Library On Display | JP/GEN/Vol 20, No 2/55510427 (Browse shelf(Opens below)) | Vol 20, No 2 (10/03/2019) | Not for loan | April, 2019 | 55510427 |
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In recent years, there is an increasing trend of share repurchase announcement by Indian firms. This article attempts to examine whether open market share repurchase announcements in India lead to excess stock returns and to identify the factors responsible for additional stock returns. Apart from a standard market method, the price behaviour is examined on an individual basis. The results show that the firms, on an average, do not experience price improvement after share repurchase. While 24 per cent of the firms lose and 10 per cent gain, the rest experience no change. In normal times, investors prefer small-cap companies, but post-announcement, promoters’ share and premium play an important role.
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