Thank you for sharing your perspective. I have the following thoughts
-
Promoters participating in the buy back means that they are selling their shares not in the open market, but at a predetermined price, although their stake in the company wouldn’t be reduced.
-
The buy back price is currently at around a 13% premium to the current price, definitely there is scope for the price to go higher than now or in the future, so there isn’t much benefit that they would get on selling their shares.
-
Them participating might mean that the entitlement ratio for other shareholders tendering shares would now be lesser.
-
I’m not very clear on this final point, so apologies for my misinformation. Won’t the buy back attract capital gains tax for the selling shareholders?
While yes, there is no issues with the promoters participating in the buy back and it’s a very small % of shares that they would be tendering, in an ideal world, I was hoping that they would have seen this as a way to increase their shareholding in the company, and believe that they could gain more by the share price moving higher in the long run.