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Jurnal Ekonomi Malaysia

60 (1) 2026 –

Share Buyback Motivations Among Indian Manufacturing Companies: Evidence from Open Market and Tender Offers
Motivasi Pembelian Balik Saham dalam Kalangan Syarikat Pembuatan di India: Bukti daripada Pasaran Terbuka dan Tawaran Tender

School of Management
Sapthagiri NPS University
#14/5, Chikkasandra, Hesarghatta Main Road, 560057, Bengaluru, India.

css2246@gmail.com

School of Business and Management
Christ University, Bengaluru, India
Dharmaram College
Hosur Main Road, Bhavani Nagar, Post, Bengaluru, Karnataka 560029

naveenan.08mba@gmail.com

City Graduate School
City University Malaysia
City Graduate School, City University Malaysia, 46100 Petaling Jaya, Selangor

kokloangooi94@hotmail.com

Abstract

This study examines the primary drivers of share buyback decisions among Indian manufacturing firms, with particular emphasis on the roles of market undervaluation, capital structure optimisation, and excess liquidity. Using a quantitative research approach, the analysis covers 230 buyback announcements by manufacturing firms listed on the Bombay Stock Exchange from FY 2000 to FY 2018. Multiple regression models are applied to evaluate the influence of key firm-level factors, including undervaluation measured by the market-to-book ratio, profitability measured by the return on capital employed, dividend payout, capital structure measured by the debt-to-equity ratio, and excess liquidity measured by the cash-to-current liabilities ratio on the propensity to repurchase shares. The results indicate that undervaluation, excess liquidity, and capital structure are significant determinants of buyback activity, with firms being more likely to engage in repurchases when shares are undervalued, surplus liquidity is available, and adjustments to leverage are warranted. Profitability shows a weaker relationship, suggesting a preference among highly profitable firms to reinvest earnings rather than return capital through a buyback. These findings extend financial signalling theory by reinforcing the role of undervaluation in buyback decisions and offer practical insights for corporate managers, policymakers, and investors to align financial strategies with market conditions.

Keywords

buyback drivers; open market offer; Share buyback; tender offer
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C, S., R V, N., & Loang, O. K. (2026). Share Buyback Motivations Among Indian Manufacturing Companies: Evidence from Open Market and Tender Offers. Jurnal Ekonomi Malaysia, 60(1), –.

@article{c2026share,
  title={Share Buyback Motivations Among Indian Manufacturing Companies: Evidence from Open Market and Tender Offers},
  author={C, Sivashanmugam and R V, Naveenan and Loang, Ooi Kok},
  journal={Jurnal Ekonomi Malaysia},
  volume={60},
  number={1},
  pages={—},
 

year={2026},
}

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