New Delhi, May 11 -- A share or stock buyback occurs when a company repurchases its own shares from current shareholders, either through a tender offer or by purchasing shares on the open market. Usually, in the tender method, companies propose a price above the current market price, making it appealing for shareholders to participate.

With the open market method, companies acquire shares directly from the secondary market over time. On the other hand, the tender offer permits shareholders to submit a portion of their holdings during a designated timeframe. Buybacks are often viewed as an alternative to dividends for rewarding shareholders.

From an investor's perspective, an announcement of a buyback is typically seen as a demonstration...