Buy-Back from the Open Market - Chapter IV

1. A company intending to buy-back its specified securities from the open market shall do so in accordance with the provisions of Chapter IV of the Regulations. [Regulation 14 (1)]

2. The buy-back of specified securities from the open market may be in any one of the following methods:

   1. through stock exchange

   2. Book Building process.

A company shall buy-back its specified securities through the stock exchange as provided hereunder (in addition to common formalities applicable to all methods.

1. The special resolution referred to in regulation 5 or the resolution passed by the Board of Directors at its meeting as referred to in regulation 5A shall specify the maximum price at which the buy-back shall be made;

2. The buy-back of the specified securities shall not be made from the promoters or persons in control of the company;

3. The company shall appoint a merchant banker and make a public announcement as referred to in regulation 8;

4. The public announcement shall be made at least seven days prior to the commencement of buy-back;

5. A copy of the public announcement shall be filed with the Board within two days of such announcement along with the fees as specified in schedule IV;

6. The public announcement shall also contain disclosures regarding details of the brokers and stock exchanges through which the buy-back of specified securities would be made;

7. The buy-back shall be made only on stock exchanges with electronic trading facility;

8. The buy-back of specified securities shall be made only through the order matching mechanism except 'all or none' order matching system;

9. The company and the merchant banker shall give the information to the stock exchange on a daily basis regarding the specified securities purchased for buy-back and the same shall be published in a national daily;

10. The identity of the company as a purchaser shall appear on the electronic screen when the order is placed.

1. Subject to the provisions of sub-regulations (2), the provisions of regulation 12 pertaining to extinguishment of certificates shall be applicable mutatis mutandis.

2. The company shall complete the verification of acceptances within fifteen days of the pay-out.

1. A company may buy-back its specified securities through the book-building process as provided hereunder:

   1. The special resolution referred to in regulation 5 or the resolution passed by the Board of Directors at its meeting as referred to in regulation 5A shall specify the maximum price at which the buy-back shall be made.

   2. The company shall appoint a merchant banker and make a public announcement as referred to in regulation 8.

   3. The public announcement shall be made at least seven days prior to the commencement of buy-back.

   4. Subject to the provisions of sub clause (i), (ii) and the provisions of regulation10 shall be applicable.

      1. The deposit in the escrow account shall be made before the date of the public announcement.

      2. The amount to be deposited in the escrow account shall be determined with reference to the maximum price as specified in public announcement.

   5. A copy of the public announcement shall be filed with the Board within two days of such announcement along with the prescribed fees.

   6. The public announcement shall also contain the detailed methodology of the book-building process, the manner of acceptance, the format of acceptance to be sent by the security holders pursuant to the public announcement and the details of bidding centres.

   7. The book building process shall be made through an electronically linked transparent facility.

   8. The number of bidding centres shall not be less than thirty and there shall be at least one electronically linked computer terminal at all the bidding centres.

   9. The offer for buy back shall remain open to the security holders for a period not less than fifteen days and not exceeding thirty days.

   10. The merchant banker and the company shall determine the buy-back price based on the acceptances received.

   11. The final buy-back price, which shall be the highest price accepted shall be paid to all holders whose specified securities have been accepted for buy-back.

2. The provisions of sub-regulation (5) of regulation 9 pertaining to verification of acceptances and the provisions of regulation 11 pertaining to opening of special account and payment of consideration shall be applicable mutatis mutandis.

The provisions of regulation 12 pertaining to extinguishment of certificates shall be applicable mutatis mutandis.