SEBI Buyback Rule Revival: IT & PSU Stocks to Watch

SEBI Buyback Rule Revival: What the August 2026 Change Actually Means SEBI's decision to reinstate the open market buyback route, effective August 1, 2026, is the most consequential structural change to India's buyback framework since open market purchases were banned in September 2024. Companies can now repurchase shares directly through stock exchanges, alongside the existing tender offer and book-building routes. The 66-working-day completion window gets most of the attention. It shouldn't. The mandatory 40% deployment in the first 33 days is the part the market hasn't fully priced in. That front-loading requirement forces management's hand early, which is exactly the point. You can't announce a buyback and then quietly let it expire. The SEBI buyback rule change matters because it shifts the capital allocation math for cash-heavy companies. Open market buybacks historically trade at tighter premiums to market price than tender offers. Less immediately rewarding to shareholders, yes. But far easier for companies to execute quietly and consistently. If a company sits on ₹15,000 crore in net cash and announces a ₹3,000 crore buyback through the exchange route, the EPS accretion is gradual. It's still real, and it's tax-efficient compared to dividends for a certain class of institutional shareholders. The question nobody's asking loudly enough: which of these cash-rich companies actually *needs* to buy back stock, and which is doing it to paper over weak reinvestment opportunities? IT Sector: Who Has the Cash and the Motive [TCS](/stock/TCS) is the obvious name. As of Q4 FY25, NSE: TCS generated free cash flow of approximately ₹46,000 crore for the full year, with a conversion rate above 100% of net income. TCS has already executed multiple buybacks, including ₹17,000 crore in FY23 and ₹18,000 crore in FY22. The open market route suits TCS precisely because it doesn't need to offer a 15-20% premium to get shareholders to tender. Its FairStock Score above 75 re...