Reaction of Stock Price Buyback Announcements - Sector wise Analysis of Indian Companies

This paper aims to investigate the impact of share buyback announcements on stock prices as these corporate announcements have an impact on stock price in the form of positive, negative and neutral ways. The study includes 89 companies listed in the exchange and analyzed sector wise which is new in this research area. The study used an event window of 126 working days using event studies methodology. The results show that the market reacts positively with significantly positive Average Abnormal Returns on t0 and t+1 day. Around 50% of the stocks showed a positive response in stock value after the announcement of the buyback. Results indicate that logistics, oil and minerals, manufacturing, media, automobile, IT, real estate and infrastructure sectors have shown post announcement negative impact on stock price whereas hospitality, healthcare, pharma have indicated positive impact after the announcement. Beverages companies have not experienced change in stock price after theannouncement.