Stock Market Reaction of Share Buyback: A Study with reference to select Indian Companies Dr. Rakshit Debdas*, Chatterjee Payel** *Professor, Department of Commerce, The University of Burdwan, Bardhhaman, West Bengal, India **Trainee Teaching Associate, Finance & Control, Indian Institute of Management, Kolkata, West Bengal, India Online published on 5 November, 2018. Abstract Over the years share buyback has evolved as a strategic financial tool to implement share price undervaluation. The study with the sample of 111 share buyback announcement, aims to record the share price effect with respect to share buyback. The event study methodology has been accounted in the computation of excess return by the use of linear market model. The unadjusted Average Abnormal Return and the Control Adjusted Average Abnormal Return both exhibit positive effect of share buyback in the pre-buyback period for short duration with markets’ overreaction thereafter. This reaction of buyback on share prices characterizes semi-strong form of market. Top Keywords Share buyback, Abnormal Return (AR), Average Abnormal Return (AAR), Cumulative Average Abnormal Return (CUAAR), Control Adjusted Average Abnormal Return (CA-CAAR), Control Adjusted Cumulative Average Abnormal Return (CA-CUAAR). Top |