Mutual Fund Asset Class Returns 30Jun2026

Mutual Fund Asset Class Returns 30Jun2026 

 

Follow @vrk100

 

(This is my 522nd blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.

The views expressed here are for information purposes only and should not be construed as a recommendation or investment advice. While the author is a CFA Charterholder with nearly 25 years of experience in financial markets, this content is intended to share general insights and does not constitute financial guidance. 

Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.) 

  

 

This is an update to my earlier blog, published on 15Jan2026, which analysed mutual fund returns up to 31Dec2025. This edition reviews the latest data available as at 30Jun2026.

The analysis covers 21 mutual fund categories across equity, debt, hybrid and commodity (gold and silver) funds. Its main purpose is to identify categories that have delivered similar returns over time. 

This may help investors simplify their portfolios by avoiding unnecessary overlap and choosing a smaller number of categories that can meet their investment objectives.

If two categories have delivered almost identical outcomes over many years, there may be little benefit in holding both, unless they serve different investment objectives or tax purposes. 

 

Analysis continues below 

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Related blogs:

Mutual Fund Asset Class Returns 31Dec2025 (MF categories with similar returns)

Mutual Fund Asset Class Returns 02Jun2025

 

Mutual Fund Asset Class Returns 30Sep2024 

  

Mutual Fund Asset Class Returns 31Mar2024 (MF categories with similar returns)

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1 Trailing returns

The most striking observation is that several seemingly different fund categories have delivered remarkably similar long-term returns.

Aggressive hybrid funds and large cap funds have generated almost identical returns over three, five and ten years. Investors expecting one category to consistently outperform the other would have been disappointed.

Similarly, Flexi Cap and ELSS funds have produced almost the same long-term returns. The principal distinction between them is not performance but taxation. 

ELSS funds qualify for tax deduction under the old tax regime, while Flexi Cap funds offer greater flexibility without a lock-in period.

Among hybrid funds, conservative hybrid and equity savings funds also display very similar return patterns over all periods.

Debt funds exhibit an even stronger convergence. Banking and PSU, corporate bond, floater, gilt and dynamic bond funds have all delivered annualised returns in a fairly narrow range over five and ten years. 

Credit risk funds have earned somewhat higher returns, but investors should remember that these come with higher credit risk.

Likewise, arbitrage funds and liquid funds have produced almost identical long-term returns despite investing in different instruments (they have different tax implications).

The message is straightforward. Many categories that appear different have rewarded investors in much the same way over long periods.

Table 1 showing trailing returns, for various periods, of 21 MF categories >

Category assets are added in the table so that readers can make out how popular a particular category is with the investors. 

 

2 Annual returns 

The annual return table tells a complementary story.

Returns can differ sharply from one year to another, particularly in equity funds. Mid cap and small cap funds have enjoyed spectacular years, followed by periods of weak or negative returns. 

Gold too has alternated between ordinary and exceptional years.

These short-term fluctuations often tempt investors to switch categories in search of the latest winner. However, leadership changes frequently. Yesterday's best performer can easily become tomorrow's laggard.

By contrast, categories with similar long-term returns may look quite different over one or two years. Investors should therefore avoid drawing conclusions from recent performance alone.

Table  showing annual returns (2016 to 2025), for various periods, of 21 MF categories > 

 

 

3 Investment Implications 

Many investors accumulate mutual funds over time, often ending up with six, eight or even ten categories. This creates the appearance of diversification but frequently results in overlap.

If two categories have delivered similar returns over long periods, holding both may add complexity without materially improving expected returns. Investors should instead ensure that each category serves a distinct purpose within the portfolio.

For example, an investor may combine a broad-based equity category such as Flexi Cap or Large Cap with a Mid Cap or Small Cap fund for higher growth potential, a debt category for stability, and perhaps gold for diversification. 

Such a portfolio may achieve the desired asset allocation without spreading investments across numerous categories with similar return characteristics.

This does not mean that one category is always a substitute for another. Tax treatment, investment mandate, volatility and liquidity also matter. 

Nevertheless, return history suggests that investors should first ask whether an additional category genuinely improves the portfolio before adding it.

 

4 Conclusion 

Historical returns cannot predict future performance. However, they can reveal useful patterns.

The data suggest that several mutual fund categories have delivered remarkably similar long-term returns despite differences in labels and investment mandates. Investors may therefore benefit more from selecting a few distinct categories than from holding many overlapping ones.

In investing, simplicity is often an advantage. A portfolio built around a small number of well-chosen categories is generally easier to understand, monitor and rebalance than one containing numerous funds that ultimately deliver similar outcomes.

The analysis is based on historical returns and should not be construed as a prediction of future performance or as investment advice.

Check below for references and additional notes. 

 

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References:

 

Value Research Mutual Fund Monitor - annual and trailing returns   

Tweet thread 04Jun2025 Gilt funds vs Dynamic Bond funds - comparison of returns and risk parameters, data interpretation, implications of wider range of dynamic bond funds vs narrow range of gilt funds

 

Tweet thread 04Jun2025 Chasing maximum returns, dopamine rush, ending up with sub-optimal returns, wide range of returns 

 

Tweet thread 04Jun2025 Flexi cap vs Large Cap funds - wide range of  returns on a 1-, 3- and 5-years basis

 

Tweet thread 04Jun2025 Aggressive Hybrid vs Equity large cap funds - downside protection, Best & Worst period returns from Value Research, standard deviation range, risk parameters from Morningstar, etc.

 

Tweet thread 03Jun2025 Flexi Cap funds vs Equity Savings funds - Best & Worst period returns - drawdown higher for flexi cap funds 

 

Tweet thread 03Jun2025 Equity Savings funds (hybrid category) vs Dynamic Bond Funds - on a trailing basis over 1- to 10-year periods, Equity Savings funds generated superior returns vs Dynamic Bond funds - standard deviation range from Value Research, data interpretation, etc.

 

Tweet thread 02Jun2025 Conservative Hybrid funds vs Equity Savings funds (both hybrid category) - downside protection, Best & Worst period returns from Value Research, standard deviation range, risk parameters from Morningstar, etc.

 

Tweet thread 02Jun2025 Hybrid mutual funds capital gains taxation

 

Tweet thread 25Dec2024 (new Tweets added in Jun2025 also) Debt mutual funds capital gains taxation - LTCG / STCG tax - gilt funds - dynamic bond funds - liquid funds - 

 

 

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Additional data:

Screenshots of annual and trailing returns from Value Research >

 

 

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Related Blogs on Mutual Funds:

 

 

Mutual Fund Asset Class Returns 31Dec2025

Mutual Fund Asset Class Returns 02Jun2025

 

Mutual Fund Asset Class Returns 30Sep2024 

  

Mutual Fund Asset Class Returns 31Mar2024 (MF categories with similar returns)

 

Mutual Fund Asset Class Returns 31Dec2023 

 

Mutual Fund Asset Class Returns 30Sep2023

 

Mutual Fund Asset Class Returns 31Mar2023

Mutual Fund Asset Class Returns 31Dec2022

Mutual Fund Asset Class Returns 30Jun2022

Mutual Fund Asset Class Returns 31Mar2022

 

Mutual Fund Asset Class Returns 31Dec2021

NSE Emerging Indices Fundamentals Comparison 31Dec2025

 

NSE Indices Calendar Year Returns 2006 to 2025  07Jan2026  

 

Factor Investing in India: Do "Smart Beta" Indices Outsmart Nifty 50 and Midcap 150? 24Nov2025

 

Passive Titans of India: The Top 10 Equity Indices by Fund Size 17Jul2025 

 

NSE Indices Fundamentals Comparison 31Dec2024 

 

Arbitrage Funds and Avenues 24Jul2024

 

Rapid Growth is Assets of India's MF Industry 18Jul2024

Mutual Fund Categories with Similar Returns 17Jul2024

 

Side Pocketing Episode of Aditya Birla SL Dynamic Bond Fund 17Jul2024

 

Crux of Kotak Debt Hybrid Fund 15Jul2024

India Fixed Income Data Bank 02Jul2024

The Little Secret Behind Nifty Next 50 Index's Recent Success 13May2024

NSE Indices Calendar Year Returns: 2006 to 2024   05May2024

 

How to Buy Nifty Midcap Index 03May2024 

 

NSE Emerging Indices Comparison 31Mar2024 

 

India Passive Funds and Their Asset Size 29Apr2024   

 

Guide to Tracking Error of Mutual Funds 27Apr2204  

 

Gilt Funds Worth Considering! 14Apr2024

 

Select Gilt Funds Performance 05Mar2024

 

Equity ETFs and Equity Index Funds Compared 05Feb2024

 

Indian Equity ETFs Worth Considering

 

Analysis of Nifty 100 Low Volatility 30 Index

 

Quarterly Data of MF Assets 31Mar2023

 

Understanding Corporate Debt Market Development Fund (CDMDF) 

Negative Impact of Debt Mutual Fund Tax Changes 

 

EPFO Investments in Stocks Via ETFs 

 

NSE Indices (Nifty 50, Nifty Next 50, Nifty 100 and Nifty 500) Comparison 31Dec2022

Why Do Indian Equity MFs Always Disappoint Investors?

 

Indian Mutual Funds and the Art of Ripping off Investors

  

Who is Eating My Gold ETF Return?

 

 

 

Why Share Buybacks Are Making A Comeback In India 22Jun2026

Why Share Buybacks Are Making A Comeback In India 22Jun2026

 

Follow @vrk100

 

(This is my 521st blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.

The views expressed here are for information purposes only and should not be construed as a recommendation or investment advice. While the author is a CFA Charterholder with nearly 25 years of experience in financial markets, this content is intended to share general insights and does not constitute financial guidance. 

Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.) 

  

 
India’s share buybacks have moved in cycles over time. Some years show strong activity. Other years are weak. The pattern is not random. It is shaped by profits, market conditions and most importantly, taxation and regulation.

Recent changes in buyback taxation rules by Govt of India and SEBI policy have again brought buybacks into focus.

1 Early years: limited activity > 

In the early 2000s, buybacks in India were limited and irregular. The overall amounts were small, and only a small number of companies used this route to return cash to shareholders.

For example, in 2000-01, buybacks were about Rs 1,297 crore. In 2003-04, they fell to just Rs 52 crore (see Chart 1 below for data).

This period also saw strong focus on growth and investment in India Inc. Many firms were expanding capacity after major economic reforms, including the Electricity Act, public sector disinvestment and other liberalisation measures under the Vajpayee government. 

As a result, capital expenditure remained a priority over shareholder payouts.

However, this did not translate into a broad-based trend.

Overall, buybacks in this phase were not a mainstream capital allocation tool. Dividends and reinvestment remained the dominant choices for companies.

Moreover, buybacks in the 2000s were small as the Indian market itself was still developing.

 

(article continues below) 

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Related blogs:

Promoters, Taxes and Buybacks: Early Trends in India’s FY 2026-27 Market 19Jun2026  

Beyond Entitlement: How Tender Offer Buyback Acceptance Really Works 18Jun2026  

India’s New Buyback Tax Rules from Apr2026: What It Means for You 22Mar2026

A Layperson's Look at India's Complicated Tax Rules on Share Buybacks 16Sep2025

Negative Impact of Debt Mutual Fund Tax Changes (including taxation of equity mutual funds also) 25Mar2023 

Buyback Offers and Weblinks

Check blog Kaveri Seed Company Buyback Offer 2023 for typical list of activities / timeline of events relating to buyback offers 

When is the Next Buyback Offer Likely?

 
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2 Gradual rise: 2006 to 2012 >

From 2006 onwards, buybacks started to increase slowly. But the trend was uneven.

The global environment also influenced behaviour later in the decade. 

Even during events like the 2008 global financial crisis, when markets fell sharply and valuations became attractive, only select companies used buybacks opportunistically. 

The next year, they fell again. 

Some years saw spikes, while others saw sharp declines. 

For example, in 2011-12, buybacks rose to about Rs 13,765 crore. Indian stocks fell sharply due to overall pessimism about Indian economy, so apparently companies found the valuations attractive and announced buybacks during the year. 

Some companies that undertook buybacks in 2011-12 include:

Reliance Industries (its open market buyback spanned 2011-12 and 2012-13)
Reliance Infrastructure
Zee Entertainment
PVR Ltd
Amtek Auto
Crisil Ltd

This shows that companies were still experimenting with buybacks as a capital return tool.

3 Strong growth phase: 2016 onwards >

From around 2016, buybacks became much more common.

Activity rose sharply in 2017-18 and 2018-19, when buybacks crossed Rs 50,000 crore in each year.

Buybacks spiked in 2017‑18 and 2018‑19 mainly because they were far more tax‑efficient than dividends back then. Cash‑rich IT giants like TCS, Infosys, Wipro and HCL led the charge, returning huge sums. 

Private capex too was subdued during the period, with companies preferring the shareholder payout route than reinvestment.  

4 Recent years: high but uneven >

Chart 1 showing details of share buybacks in India, both amount and number, from 19998-99 to 2026-27 (So far in 2026-27 till 22Jun2026, 19 listed companies actually announced buyback offers, differing from Prime Database data, as Prime Database may have considered offers with letter of offers only) >

After 2020, buybacks remained high but volatile.

In 2023-24, buybacks reached about Rs 51,143 crore, one of the highest levels on record.

After the FY 2023–24 peak, both buyback value and the number of offers fell. There are some possible reasons.

First, taxation shifted to shareholders from 01Oct2024. Buyback proceeds during the period, from 01Oct2024 to 31Mar2026, taxed as "deemed dividends" at slab rates for shareholders, with no cost set-off. This removed the earlier tax advantage.

Second, many companies rushed to complete buybacks before the change, pushing activity into 2023–24 and early 2024–25. This made the later fall sharper.

Third, SEBI phased out the open market route effective from 01Apr2024. As a result, there were zero open market buyback offers in FY 2024-25 and 2025-26. 

Fourth, dividends became relatively more attractive once the tax advantage of buybacks disappeared. Many companies shifted to dividend payouts instead.

5 Taxation: the most important driver >

India's capricious tax changes have been one of the biggest factors shaping buyback trends in India.

India has changed buyback taxation multiple times in a short period of eight to nine years.

Earlier, companies paid a buyback tax of 23.30 per cent. Investors received money tax-free.

From 01Oct2024, this changed again. Companies stopped paying tax. Instead, investors were taxed on the full amount received, treated as "deemed dividend." This depended on individual tax slabs and made outcomes less predictable.

This created confusion and reduced clarity for both companies and investors.

From 01Apr2026, a new buyback tax system started. Buybacks will be taxed as capital gains. Tax will apply only on actual profit, not the full proceeds.

This brings buybacks closer to the tax treatment of normal share sales in the market.

Promoters will face higher effective tax rates, around 22 per cent for corporate promoters and 30 per cent for individual promoters.

6 SEBI and the open market route >

India's capital market regulator, SEBI, too has played a role in shaping buyback activity.

SEBI had earlier banned (rather withdrawn) the open market buyback route during 2024–25 and 2025–26. 

During this period, companies were restricted to the tender offer route only for buybacks.

SEBI has now reintroduced the open market route with "safeguards" and disclosure rules after reviewing the framework and tax environment. The open market route through stock exchanges will be open from 01Aug2026.

7 Tender offer vs open market buybacks: Evolving framework >
 

India has historically had two routes for share buybacks.

Tender offer buybacks are structured. Companies offer a fixed price, usually at a premium to the market. Shareholders can choose to participate. This makes outcomes more predictable and easier to understand.

Open market buybacks take place through stock exchanges over time. Companies buy shares at prevailing market prices within regulatory limits. This route offers flexibility, but actual execution depends heavily on market conditions.

The Great Eastern Shipping Company provides a clear example of how open market buybacks can fall short of their announced size. 

The company planned a Rs 225 crore buyback in 2022, but could deploy only about Rs 133 crore, or roughly 59 per cent. This happened because the market price stayed above the buyback price, limiting execution.

However, this open market framework has not been stable in recent years.

SEBI had restricted the open market route during FY 2024–25 and FY 2025–26, with companies doing no buybacks at all in these two years using this route. This meant buyback activity during this period was entirely through the tender offer route (see chart 2 below for data).

As mentioned in Section 6 above, the open market route has now been reintroduced, effective 01Aug2026.

As a result, recent data show a temporary distortion in the mix, with tender offers accounting for almost all buybacks in the restricted period.

Even so, across the full historical cycle, tender offers remain the dominant method. Companies tend to prefer them due to clearer pricing, simpler execution and more predictable outcomes for minority shareholders.

Chart 2 showing data on recent share buybacks in India by type (tender offer vs open market; *data for 2026-27 are till 22Jun2026) >

8 What is driving the comeback >

The revival in buybacks is visible in recent data. In FY 2026–27 (till 22Jun2026), there have been 19 tender offer buybacks in less than three months. This compares with 40 in 2022–23 and 26 in 2021–22, suggesting a faster pace in the current financial year.

One driver is stronger cash flows in several sectors and attractive valuations, after Indian stock market hit a low by the end of Mar2026. 

Second is regulatory stabilisation after multiple policy changes in recent years. The current framework offers more clarity than the transition phase of 2024–26.

Third, and most important, is taxation. The shift back to capital gains treatment from 01Apr2026 makes buybacks more predictable and closer to normal equity sales.

Together, these factors point to a less erratic buyback environment, with early data already showing improved momentum.

9 Conclusion >
 

Buybacks in India are no longer rare. They have become a regular tool for capital return, but remain cyclical in nature. They move with profits, valuations and changes in tax and regulatory policy.

Among these, taxation has been the most powerful driver, as frequent and illogical changes created uncertainty and affected corporate behaviour. The new regime from 01Apr2026 brings greater clarity and a less volatile structure.

What stands out in the current financial year is the heightened pace of tender offer buybacks. Early data for 2026–27 already shows activity above full-year levels seen in recent years, indicating renewed momentum.

In simple terms, the buyback cycle in India is being shaped not just by markets, but by tax policy and regulation. And the latest data suggest that activity is picking up again, led by tender offer buybacks.

However, investors need to be wary of capricious and arbitrary nature of India's tax regime and capital market over-regulation.  

Check below for references and additional notes. 

 

- - -

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Additional data:

How to score self-goals, the Thiru PM Modi gov't way?

(tweet thread 22Jun2026 on this) 

Indian government effectively killed a golden goose with frequent changes to taxation of dividends and buybacks (this is my personal opinion).  

The amount of share buybacks, by India's listed companies, during the past five years (FY 2021-26) has fallen sharply by nearly 35 per cent to Rs 1.32 lakh crore compared to the five-year period of FY 2016-21. 

35% sharp fall in share buybacks means lower tax revenue for Consolidated Fund of India.

Self-goals include:

Capricious changes to taxation of dividends / buybacks (7 to 8 changes since 2016). 👎

Banning of open market route for share buyback route by SEBI in 24-25 & 25-26.👎

Data showing Buyback activity in India by Five-year Buckets (Five-year rolling periods of sahre buyback activity in India) >

 

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References:

Tweet thread 20Jun2026  SEBI circular 19Jun2026 reintroducing "open market" share buybacks in India

Tweet thread 01Feb2026 No need to do "Bhalle Bhalle" -- tax changes on buyback announced in Union Budget presented on 01Feb2026

Tweet thread 01Feb2026  PM Modi gov't changed the buyback taxation as their (unpublished) data shows that from 01Oct2024–31Jan2026, the Jul2024 buyback tax change raised minimal revenue.

23Dec2024 Tweet thread - Dividends / buyback announcements by companies are influenced by capricious changes in taxes. Dividend distribution tax (DDT) was introduced and later it was abolished. Now, dividends are taxable in investors' hands (taxtortion by PM Modi gov't). 

22Sep2020 Tweet shareholder yield (buyback plus dividends)

Prime Database > Number and amount of Share buybacks from FY 1998-99 to FY 2026-27 > 

BSE weblink to search for past buyback offers (only tender offers - dropdown menu) during a time period (this weblink can also be used for other corporate actions) -- this URL / weblink will not provide details of past buyback offers that are done via 'open market route via stock exchanges'

SEBI weblink to search for past buyback offers (both tender and open market offers -- dropdown menu) during a time period

Screener.in (after login) weblink to search for past buyback offers (e.g., enter 'Moil buyback' in search bar and several results will pop up)

 

Promoters, Taxes and Buybacks: Early Trends in India’s FY 2026-27 Market 19Jun2026

Promoters, Taxes and Buybacks: Early Trends in India’s FY 2026-27 Market  19Jun2026

 

Follow @vrk100

 

(This is my 520th blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.

The views expressed here are for information purposes only and should not be construed as a recommendation or investment advice. While the author is a CFA Charterholder with nearly 25 years of experience in financial markets, this content is intended to share general insights and does not constitute financial guidance. 

Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.) 

  

 

Buybacks in India are changing again.

Recent tax and regulatory shifts may be affecting how companies return cash to shareholders.

This blog post is a simple attempt to track early patterns in FY 2026-27 buyback tender offers, and whether promoter structure seems to matter.

 

(article continues below) 

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Related blogs:

Beyond Entitlement: How Tender Offer Buyback Acceptance Really Works 18Jun2026  

India’s New Buyback Tax Rules from Apr2026: What It Means for You 22Mar2026

A Layperson's Look at India's Complicated Tax Rules on Share Buybacks 16Sep2025

Negative Impact of Debt Mutual Fund Tax Changes (including taxation of equity mutual funds also) 25Mar2023 

Buyback Offers and Weblinks

Check blog Kaveri Seed Company Buyback Offer 2023 for typical list of activities / timeline of events relating to buyback offers 

When is the Next Buyback Offer Likely?

 
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2 What this article is about

This is a piece to track early buyback activity in India in FY 2026-27.

The focus is on tender offer buybacks announced after 01Apr2026 (as of now, only tender offer buybacks are allowed in India by capital market regulator SEBI).

The aim is to understand whether promoter type and recent tax changes may be linked to buyback decisions.

This is not a formal research study. It is a way to organise early observations in a clear and simple form.

 

3 Why buybacks matter

Buybacks are one of the main ways Indian companies return cash to shareholders.

They reduce the number of shares traded in the market.

This can improve earnings per share and signal that management believes the stock is undervalued. But this may not be so in all cases. 

In India, buybacks are also closely linked to promoter behaviour.

Most listed companies are controlled by promoters, so capital return decisions often reflect promoter incentives as well as company fundamentals.

 

4 Promoters and why they matter

Most listed companies in India are controlled by promoters.

Promoters are usually founding families or long-term controlling groups.

But their ownership is often not simple. It can include individuals, family trusts, limited liability partnerships (LLPs), holding companies and other group entities.

Because of this, promoter structure can influence how companies think about returning cash to shareholders (check additional note 2 at the end of the blog)..

Buybacks may reflect these underlying incentives, not just market conditions or valuations.

As of Jun2025, only 42 companies in India have zero promoter holding, out of a universe of over 1,000 listed companies with market capitalisation above Rs 2,000 crore.

 

5 How promoters are classified here

Companies are grouped into three simple categories based on ownership.

Individual or family-controlled: Control ultimately rests with founders or families, even if holdings are routed through trusts, LLPs or holding companies.

Corporate promoter: Control is held by another corporate entity, including PE funds, institutional investors or structured investment vehicles.

No promoter: No identifiable controlling promoter group.

This is a simplified classification used only to understand buyback incentive patterns.

6 Early buyback trend in FY 2026-27

Table showing listed Indian companies that have announced tender buyback offers since 01Apr2026. Some of these have already completed buybacks and are some are in the process.

The data include sector / industry, promoter holding and promoter type. 

What the above table reveals?

So far, only 19 companies have announced tender buyback offers in FY 2026-27.

This appears to be a very small number compared to the universe of more than 4,000 listed companies in India, and it appears low for a period of about three months. The tepid / measured response was not wholly unexpected. 

As of now, the only route allowed for share buybacks in India is tender offer, according to norms from India's capital market regulator SEBI. 

All the above 19 buyback offers are through tender offer.  Though every care is taken to include all companies under the mainboard, it may have missed a few names inadvertently.  

Buyback activity in FY 2026-27 is heavily concentrated in promoter-controlled companies, especially family-controlled groups.

Only a very small number of companies have no promoter structure and even fewer fall under true corporate or institutional promoter control.

Most buybacks are coming from sectors like pharmaceuticals, IT services and textiles.

The promoter structure is largely individuals / family-linked, even when held through trusts or holding companies, rather than truly dispersed ownership.

Overall, the early pattern suggests buybacks are still a promoter-driven phenomenon rather than a broad market-wide trend. 

 

7 Tax changes and buyback offers

Tax is one of the important factors that can influence buyback decisions, along with the extent of operating cash flow generation, stock valuations and a company’s future investment plans.

If a company has strong cash flow, it has more flexibility to return money to shareholders through dividends or share repurchases.

If cash flow is weak or uncertain, the company is more likely to conserve cash instead of doing buybacks.

From 01Apr026, buyback taxation in India has changed again.

Under the revised rules, the effective tax burden differs by promoter type.

Individual promoters face a higher effective tax rate of around 30 per cent on buyback gains. Corporate promoters face a lower effective rate of around 22 per cent.

This difference may influence how promoter groups think about buybacks as a method of returning cash to shareholders.

However, tax is only one part of the decision, and it works alongside several business and market factors.

 

8 Gist

Buyback activity in FY 2026-27 so far appears limited, with only a small number of tender offers compared to the large universe of listed companies in India.

Most buybacks are still concentrated in promoter-controlled firms, suggesting that promoter incentives continue to play a central role in such decisions (check additional note 1 at the end of the blog).

The recent change in buyback taxation from 01Apr2026, which creates different tax outcomes for individual and corporate promoters, may be influencing behaviour.

There is a sense that capricious tax rules around buybacks in India could be affecting how promoters think about returning cash.

Corporate behaviour around buybacks will need to be observed over the next two to three quarters to understand whether any structural shift is actually emerging.

 

This blog post does not represent tax advice. I have no tax expertise and the comments on taxation are only broad, conceptual interpretations based on publicly available information. 

Check below for references and additional notes. 

 

- - -

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Apologies for wrong claim: Tweet 23Jun2026 -- Buyback pace is much higher in first three months of FY 2026-27 compared to historical data > 

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Additional notes:

1. Note on promoter incentives and taxation:

A promoter who wants to return cash has two main choices: a dividend or a buyback.

A dividend can be taxed at up to around 35–40 per cent depending on the investor / promoter. 

A buyback is taxed differently, at about 30 per cent for individual promoters or 22 per cent for corporate promoters, and only on gains.

On a simple comparison, buybacks often appear more tax-efficient than dividends.

This is why even with the new 30 per cent rate for individual promoters, buybacks may still remain attractive relative to dividends (for promoters 😃), though the outcome depends on promoter structure and situation.

 

2. Note on promoter structure and family-controlled groups:

Most large family-controlled promoter groups already hold shares through a mix of holding companies and trusts. This means buybacks may often be tendered through corporate or structured entities rather than directly in personal names. 

In such cases, the effective tax treatment may differ from individual-level holdings. As a result, the change in tax rates may influence which entity tends to participate in buybacks, rather than simply whether buybacks happen or not. 

This is a more nuanced effect than a simple comparison of 30 per cent versus 22 per cent. 

---------------

References:

Tweet 19Jun2026 Promoters, Taxes and Buybacks 

Tweet thread 19Mar2026 (zero promoter holding buybacks)  

Tweet thread 01Feb2026 No need to do "Bhalle Bhalle" -- tax changes on buyback announced in Union Budget presented on 01Feb2026

Tweet thread 01Feb2026  PM Modi gov't changed the buyback taxation as their (unpublished) data shows that from 01Oct2024–31Jan2026, the Jul2024 buyback tax change raised minimal revenue.

Prime Database > Number and amount of Share buybacks from FY 1998-99 to FY 2026-27 > 

BSE weblink to search for past buyback offers (only tender offers - dropdown menu) during a time period (this weblink can also be used for other corporate actions) -- this URL / weblink will not provide details of past buyback offers that are done via 'open market route via stock exchanges'

SEBI weblink to search for past buyback offers (both tender and open market offers -- dropdown menu) during a time period

Screener.in (after login) weblink to search for past buyback offers (e.g., enter 'Moil buyback' in search bar and several results will pop up)