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Share Buyback
In a buyback, a company uses its cash to repurchase its own shares, usually at a premium to the market price. With fewer shares left, each remaining share represents a larger slice of the company and its profits.
Why It Matters
Buybacks return cash to shareholders, and signal that management thinks the shares are undervalued.
In India
Large Indian IT companies such as TCS and Infosys have run several buybacks to return surplus cash.
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