SEBI · Corporate Action · High
SEBI caps open market buybacks at 15% of paid-up capital, free reserves
New rules from August 1, 2026, also impose cooling-off period and ban buybacks that breach minimum public shareholding.
What changed
- Open market buybacks capped below 15% of paid-up capital and free reserves (standalone and consolidated).
- Cooling-off period aligned with Companies Act before a new buyback can follow a previous one.
- Buybacks prohibited if they would cause a company to fall below minimum public shareholding norms.
The read
SEBI has tightened the rules on buybacks. From August 1, 2026, any open market buyback through the stock exchange must be less than 15% of a company's paid-up capital and free reserves, tested on both standalone and consolidated books. The regulator has also locked in a mandatory cooling-off period under the Companies Act and banned buybacks that would push public shareholding below the minimum. The message is clear: buybacks must not become a tool to skirt listing norms or drain reserves excessively. Boards and compliance teams have a month to rework their buyback plans.
SEBI15% capAugust 1, 2026
Primary source: official circular (PDF)