Published Online:July 2025
Product Name:The IUP Journal of Accounting Research & Audit Practices
Product Type:Article
Product Code:IJARAP070725
DOI:10.71329/IUPJARAP/2025.24.3.127-151
Author Name:Ch Sai Venkata Sahadev and Ch Balaji
Availability:YES
Subject/Domain:Finance
Download Format:PDF
Pages:127-151
The paper investigates price movements before and after buyback events by analyzing data from 30 companies across diverse sectors using statistical tools such as paired t-tests and correlation analysis. The findings reveal mixed outcomes: while companies like Ladderup Finance Ltd. and Symphony Ltd. experienced a significant stock price increase post-buyback, others such as Matrimony.Com Ltd. and Cera Sanitaryware Ltd. witnessed a decline. The study concludes that share buybacks can enhance shareholder value by improving financial ratios like Earnings per share (EPS) and Return on equity (ROE), and boosting investor sentiment in the short term. However, their long-term efficacy depends on factors such as company’s financial health, market conditions and strategic intent behind the buyback. While buybacks can signal management’s confidence and optimize capital structure, they may also raise concerns regarding the potential for short-termism and reduced capital for growth investments.
In contemporary financial markets, share buybacks, also known as stock repurchase programs, have emerged as a prominent strategy employed by corporations to manage their equity structure, enhance shareholder value and influence stock performance.