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Have the anomalies following share buybacks disappeared? Evidence from India

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  • Parul Goyal
  • Deepa Mangala

Abstract

Share buyback programs are viewed as effective tools for signalling undervaluation and are frequently employed by firms reporting negative abnormal returns (Stephens and Weisbach, 1998). The efficacy of these announcements is highlighted by the positive abnormal returns observed post-announcement (Ikenberry et al., 1995). The main objective of this study is to examine the impact of share repurchase announcements on stock returns in the Indian equity market. This paper encompasses the share buyback activities in India spanning from 2016 to 2023. The current study has employed event study methodology (ESM) to capture the price reaction to the buyback announcement. Furthermore, the study also investigates the impact of COVID-19 on the stock returns of buyback firms. The study statistically testifies that share repurchases do not improve shareholders' value. Additionally, the peculiar finding is that COVID-19 does not have any significant impact on buyback firms' stock performance. These findings offer valuable insights for investors, firms, policymakers, and researchers as they navigate future economic challenges.

Suggested Citation

  • Parul Goyal & Deepa Mangala, 2026. "Have the anomalies following share buybacks disappeared? Evidence from India," Global Business and Economics Review, Inderscience Enterprises Ltd, vol. 35(2), pages 156-185.
    • Handle: RePEc:ids:gbusec:v:35:y:2026:i:2:p:156-185
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