Buy-Back is a corporate action in which a company buys back its shares from the existing shareholders usually at a price higher than market price. When it buys back, the number of shares outstanding in the market reduces. ... Companies buy back shares on the open market over an extended period of time.

How do you participate in buyback?

To be able to participate in a buyback process, the investor should be have held the shares of the company before the record date declared by the company in its announcement for buyback. The shares should be held in demat form. The last date for tendering of shares for buyback is disclosed by the company in the notice.

How do you profit from buyback?

In order to profit on a buyback, investors should review the company's motives for initiating the buyback. If the company's management did it because they felt their stock was significantly undervalued, this is seen as a way to increase shareholder value, which is a positive signal for existing shareholders.