Having detected that companies at times do not undertake a buyback of shares even after announcing one, SEBI - Securities and Exchange Board of India - has decided to assess the regulations that pertain to the buyback offers.

Considering the apparently "hollow" buyback offers as a tactic to manipulate share prices, SEBI Chairman CB Bhave opined that after a close re-look at the regulations, the market regulator may make some pertinent amendments to prevent such practices.

Bhave said: "Under the current regulations, restricting such offers would entail litigation. We have got some suggestions that a company should buy a minimum quantity of shares once it announces a buyback." However, the SEBI would likely have to wait till the New Companies Bill, which proposes that SEBI should regulate all capital-related issues of a listed company.

Going by the 'back out of buyback' trends in the recent past, it is evident that a number of companies announce buybacks of huge magnitude, but later end up backing out. Since buyback announcement triggers a share-price rise, promoters sell a fraction of their holding at increased share prices.

Two of last year's prominent buyback-related incidents included DLF and Bosch, which after having announced buybacks worth Rs 1,100 crore and Rs 640 crore, respectively, ended up buying back only a part of the announced amount.