Announcement effect of tender offer share buyback around turmoil period evidence from India
- Title
- Announcement effect of tender offer share buyback around turmoil period evidence from India
- Creator
- Suresha B.; Desai K.; Thomas R.; John N.K.; Koshy E.R.
- Description
- The announcement of a buyback informs the market about the companys decision to repurchase its own shares. This announcement highlights the companys price valuation and the inefficiencies that exist in the market. This study examines the share buyback announcement effect during the COVID-19 period. The study considered the stocks listed in the National Stock Exchange (NSE) that offered share buyback under tender offer mode during the pre-pandemic period between April 2016 and February 2020 and the post-pandemic period between March 2020 and March 2022. 75 firms in the pre-pandemic period and 43 in the post-pandemic period that announced share buyback under the tender offer method were analyzed. The event study methodology using a market model was employed to determine the presence of abnormal returns during the event period, which consisted of 21 days and +21 days. The findings of the study revealed the existence of abnormal returns in and around the announcement date. Besides, statistically significant cumulative abnormal average returns (CAAR) were also found on the event day, i.e., on Day 0. The study found that the impact of buyback announcements on stock returns significantly differed before and after COVID-19 for 10 and 21-day periods, with no significant differences for shorter periods. These insights can help traders and fund managers make informed portfolio adjustments during turbulent market periods surrounding buyback announcements. The author(s) 2024.
- Source
- Investment Management and Financial Innovations, Vol-21, No. 3, pp. 160-169.
- Date
- 2024-01-01
- Publisher
- LLC CPC Business Perspectives
- Subject
- abnormal returns; CAR model; event window; market efficiency; share buyback
- Coverage
- Suresha B., School of Business and Management, Christ University, India; Desai K., NMIMS, Deemed-to-be-University, India; Thomas R., Department of Professional Studies, School of Commerce, Finance and Accountancy, Christ University, India; John N.K., School of Business and Management, Christ University, India; Koshy E.R., Department of Professional Studies, School of Commerce, Finance and Accountancy, Christ University, India
- Rights
- All Open Access; Gold Open Access
- Relation
- ISSN: 18104967
- Format
- Online
- Language
- English
- Type
- Article
Collection
Citation
Suresha B.; Desai K.; Thomas R.; John N.K.; Koshy E.R., “Announcement effect of tender offer share buyback around turmoil period evidence from India,” CHRIST (Deemed To Be University) Institutional Repository, accessed February 24, 2025, https://archives.christuniversity.in/items/show/13551.