How Indian Stocks React to Buybacks: An NSE Event Study 2024

This study examines the short-term stock market reaction to share buyback announcements by companies listed on the National Stock Exchange (NSE) of India during the year 2024. Using event study methodology, the research analyzes abnormal returns surrounding buyback announcements over a five-day event window (-2 to +2), with the estimation window spanning 250 trading days prior to the announcement. The sample consists of 34 buyback events after filtering for data availability and NSE listing. The findings indicate that share buyback announcements are associated with statistically significant positive abnormal returns, suggesting that such announcements are interpreted by the market as signals of undervaluation or efficient capital allocation. These results support theories such as signaling, undervaluation, and agency cost mitigation. The study contributes to the growing body of literature on corporate buybacks in emerging markets and provides practical insights for investors and corporate managers on the implications of buyback decisions in the Indian context.