Securities and Exchange Board of India (‘SEBI’), by way of a Notification dated July 1, 2026, has notified the SEBI (Buyback of Securities) (Amendment) Regulations, 2026 (‘Amendment Regulations’), amending the SEBI (Buyback of Securities) Regulations, 2018 (‘Buyback Regulations’). The Amendment Regulations came into force on August 1, 2026.

The Amendment Regulations introduce several changes to the buyback framework for listed companies as summarised below:

i.     Option to Dispense with Merchant Banker: By way of the newly inserted Regulation 24A, the engagement of a merchant banker for a buyback is now discretionary, and a company proposing a buyback may elect not to appoint a merchant banker for such buyback. If the company elects not to appoint a merchant banker, the obligations otherwise discharged by the merchant banker must be undertaken by the secretarial auditor and the compliance officer of the company, as applicable.

ii.    Cap on Size of Open Market Buyback: Regulation 4(iv)(b) of the Buyback Regulations, which sets out mode-wise limits for a buyback, has been amended, pursuant to which, any open market buyback through the stock exchange mechanism must be less than 15% of the aggregate of the company’s paid-up capital and free reserves, tested with reference to both standalone and consolidated financial statements.

iii.   Revised Timelines for Open Market Buyback: Regulation 17 of the Buyback Regulations, which prescribes the timeline for an open market buyback, has been amended. Under the revised timeline, an open market buyback offer must open within four working days from the public announcement and close within 66 working days from the date of opening.

iv.   Safeguard for Minimum Public Shareholding: A new Regulation 4(xi) prohibits a company from proposing any buyback that would breach minimum public shareholding requirements prescribed under the Securities Contracts (Regulation) Rules, 1957 or specified under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

v.     Cooling-Off Period Aligned with Companies Act, 2013: Regulation 4(vii) of the Buyback Regulations, which prescribes the cooling-off period between successive buyback offers, has been amended to provide that a company will not make any buyback offer within one year from the closure of a preceding buyback, in alignment with the Companies Act, 2013, thereby harmonising this aspect across both regimes.

vi.    Freeze on Promoter and Promoter Group Holdings: A new Regulation 24(i)(ea) provides that shares held by the promoter(s) and the promoter group (including associates) will remain frozen from the date of the board resolution or special resolution approving the buyback until the closure of the offer. This freeze does not apply to shares tendered in a buyback through the tender offer route. Shares subject to existing encumbrances may be transferred upon invocation, though the freeze continues thereafter, subject to SEBI-specified conditions.

In furtherance of this, SEBI issued a Circular dated July 21, 2026, directing depositories to operationalise the freeze of promoter holdings at the International Securities Identification Number (ISIN) level, requiring them to put in place the necessary operational framework and system enhancements before August 1, 2026.

vii.   Escrow and Bank Guarantee Requirements: Regulation 20 of the Buyback Regulations has been amended to strengthen escrow requirements. Bank guarantees must now be in favor of the merchant banker (where appointed) and remain valid for 30 working days beyond the later of: (a) expiry of the buyback offer period; or (b) completion of all obligations under the Buyback Regulations.

viii.  Shareholder Intimation Requirement for Open Market Buyback: A new requirement has been inserted for a company undertaking an open market buyback to send an electronic intimation to shareholders within one working day from the public announcement.