An Empirical Study on Abnormal Return Around Buyback Announcements by Indian Firms

International Journal of Scientific Research and Reviews, 2018, 7(2), 739-751

13 Pages Posted: 24 Apr 2020

See all articles by Hiral Vyas

Hiral Vyas

GLS University

Patel R.K.

Desai C.M. Arts and Commerce College

Date Written: 2018

Abstract

This paper examines the market response surrounding the share buyback announcements of large capitalised Indian companies from years 2010 to 2016 covering 73 firms. T-test was carried out to identify the abnormal return in the range before and after 10 days from share buyback announcements. The result shows a significant positive abnormal return during that period. The finding is supported with information asymmetric, which shows that stock market reacts more favourably through the repurchase announcements by large firms. This study is consistent with the signalling hypothesis that shows share repurchase announcement can be an effective tool generating abnormal return to the shareholders in the stock market in India.

Keywords: Buyback, Event study, Shareholders value

JEL Classification: G14, G32, G34

Suggested Citation

Vyas, Hiral and R.K., Patel, An Empirical Study on Abnormal Return Around Buyback Announcements by Indian Firms (2018). International Journal of Scientific Research and Reviews, 2018, 7(2), 739-751 , Available at SSRN: https://ssrn.com/abstract=3516889

Hiral Vyas (Contact Author)

GLS University ( email )

Law Garden
Elisbridge
Ahmedabad
India

Patel R.K.

Desai C.M. Arts and Commerce College

India

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