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MUMBAI: Does it make sense buying back shares in a bad market? Ask companies that are currently implementing their buyback programmes and you would definitely get an affirmative answer. Companies like Reliance Infrastructure (formerly Reliance Energy), Mastek and Great Offshore have successfully used the buyback route to take advantage of falling valuations on the Indian bourses. A few other relatively medium- and small-sized companies, including Patni Computer, SRF and Goldiam International, have also been buying shares in the open market. These six companies are estimated to have bought back shares worth Rs 820 crore, or 66% of the combined size of their offers, over the past four months. They have been successfully implementing buyback programmes despite the fact that investor confidence is shaken badly because of extremely negative global and domestic cues.

Leading the pack, Reliance Infrastructure is estimated to have bought back shares worth nearly Rs 700 crore against the buyback size of Rs 800 crore in just four months of the opening of the offer. Mastek and Great Offshore bought back shares worth Rs 63 crore and Rs 50 crore, against their respective offer sizes of Rs 65 crore and Rs 55 crore. While a few others such as Patni Computer and SRF have just begun their programmes, analysts expect more companies to join the buyback bandwagon, given several advantages of buying back shares in a bearish market. Source The Economic Times