Buyback Acceptance Ratio Calculator
In a tender-offer buyback the company repurchases only part of what shareholders offer — the acceptance ratio decides how many of your tendered shares are taken. Retail holders (up to ₹2 lakh of holdings on record date) tender inside a reserved 15% quota, where acceptance ratios are often far better than the general category.
Taxes changed sharply from 1 October 2024: buyback proceeds are now taxed as deemed dividend at your slab rate, and the cost of the accepted shares becomes a capital loss you can set off elsewhere. This calculator models the whole trade: acceptance, proceeds, tax, the loss created, and the value of shares returned unaccepted.
How it works
- Shares accepted = shares tendered × acceptance ratio; proceeds = accepted × buyback price.
- Tax = proceeds × your slab rate (+4% cess) — the full proceeds are deemed dividend, not just the gain.
- The acquisition cost of accepted shares becomes a capital loss (consideration is deemed nil for capital gains), claimable against other gains.
- Unaccepted shares come back and are valued at your expected post-buyback price.
Frequently asked questions
What determines the acceptance ratio?
The size of the buyback vs how much shareholders actually tender. Your entitlement ratio (printed in the letter of offer) is the floor; the final ratio is usually higher because not everyone tenders. Small-shareholder category ratios of 30–100% have been common in recent tender offers, against single-digit general-category ratios.
Who counts as a small shareholder?
Anyone whose holding in the company was worth ₹2 lakh or less on the record date, at the market price of that day. 15% of every tender-offer buyback is reserved for this category — the classic 'buyback arbitrage' trade was built on that reservation.
How are buyback proceeds taxed now?
Since 1 October 2024: the entire amount you receive is taxed as dividend income at your slab rate (with TDS at 10%), and separately, the cost of the accepted shares becomes a capital loss you can set off against capital gains (carry-forward 8 years). For high-slab investors this made tendering materially less attractive than the old regime.
Should I tender or just sell in the market?
Compare the after-tax outcomes: tendering earns the premium on accepted shares but pays slab tax on full proceeds (softened by the capital-loss shield if you have gains to absorb it); selling in market pays capital gains tax on just the gain. At 30% slab with no gains to offset, market sale often wins unless the premium and acceptance ratio are large — run both numbers before the tender window closes.
Related tools
Never miss a buyback announcement again.
Buyback filings hit MarketPing the minute they reach the exchange — AI-tagged with record dates and likely impact, on WhatsApp. The tender window starts when you know, not when you check.
This tool is an educational estimate, not investment or tax advice. Rates and rules change — verify current figures and consult a professional before acting.