IGI Logo

India's market regulator on Tuesday said buybacks through stock exchanges would be phased out gradually and allowed only through tenders as it seeks to develop a more "equitable" process for shareholders.

The Securities and Exchange Board of India (SEBI) also increased the minimum utilisation amount for buybacks through stock exchange to 75% from 50%.

"We feel that the tender route is the more equitable route to buy back and the other routes are vulnerable to favouritism," SEBI chairperson Madhabi Puri Buch told reporters.

The SEBI said in a statement following a board meeting on Tuesday that it would permit an upward revision of buyback price through tenders until one working day prior to the record date.

The timeline for completion of buybacks through tender offers has been reduced by 18 days, the statement added.

Among other changes, the regulator tightened governance norms for institutions, such as stock exchanges and depositories, and for real estate and infrastructure investment trusts.

The regulator also allowed certain alternative investment trusts to participate in credit default swaps as protection sellers.

It enhanced the scope of green debt securities to introduce sub-c