2018, Vol. 1, Issue 2

author(s)
Meenakshi A Singh and Dhananjay Sahu

abstract
This study investigates the relationship between price volatility in the Indian stock market and announcements of open market repurchases. A random sample of two businesses (TCS and Wipro) was chosen from among all companies that announced open market repurchases between January and December 2017 in order to evaluate the stock price responses to these public announcements. The results of the repurchase announcement analysis of both sample businesses are negative, and the analysis is carried out using the GARCH model, which is based on the diagnostic properties of time series data. Although price volatility seems to have slightly decreased, the dummy coefficient is regarded as statistically negligible for TCS and significant for Wipro, suggesting that price volatility has an impact on claimed outcomes. This is explained by the fact that open market share repurchases were not accepted by investors as cash payments, and yearly and interim dividend payments were the favoured methods of dividend payment in India for a long time. The investor community's attitudes and dynamics appear to be shifting in India very recently, and the widely held belief that share buybacks are acceptable in the form of cash transfers seems divisive.