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Why do company issue fresh shares for buy back?

Accountancy

Doesn't it beat one of the main advantages of buy back, ie, boosting per share value?


Kishore Anil

Kishore Anil

CFA L1

2K+

23-May-22 01:07

450

Answers (12)

If a share is undervalued, the issuing company can repurchase some of its shares at this reduced price and then re-issue them once the market has corrected, thereby increasing its equity capital without issuing any additional shares.


Priyanka R

Which free reserves can be used to buy back?

General research,p&l reserve,sec premium


Sairam Reddy

Sairam Reddy

CA Final

10K+

23-May-22 08:55

Sairam Reddy

General research,p&l reserve,sec premium

Capital redemption reserve???


Priyanka R

Priyanka R

CA Final

20K+

23-May-22 08:57

Priyanka R

Which free reserves can be used to buy back?

A Company can purchase its own shares and other specified securities out of â?? - its free reserve; or - the securities premium account; or - the proceeds of the issue of any shares or other specified securities. However, Buy-back of any kind of shares or other specified securities cannot be made out of the proceeds of the earlier issue of same kind of shares or same kind of other specified securities.


Swetha S

Swetha S

CA Inter

15K+

23-May-22 09:00

Priyanka R

Capital redemption reserve???

For creating that only we are using free reserves


Sairam Reddy

Sairam Reddy

CA Final

10K+

23-May-22 09:01

Priyanka R

Capital redemption reserve???

Once read sec 69 of companies act to get clarity regarding CRR


Sairam Reddy

Sairam Reddy

CA Final

10K+

23-May-22 09:04

Sairam Reddy

Once read sec 69 of companies act to get clarity regarding CRR

Ok. Thank you


Priyanka R

Priyanka R

CA Final

20K+

23-May-22 09:08

Priyanka R

Which free reserves can be used to buy back?

A Company can purchase its own shares and other specified securities out of: - its free reserve; or - the securities premium account; or - the proceeds of the issue of any shares or other specified securities.


shalu Muthukumar

shalu Muthukumar

CA Final

1K+

23-May-22 19:08

Fresh issue of equity may be done to buy back preference shares.


CA Suraj Lakhotia

CA Suraj Lakhotia

Admin

24-May-22 06:55

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