RELIANCE BUYBACK OF SHARES Buyback Shares: The repurchase of outstanding shares (repurchase) by a company in order to reduce the number

of shares on the market. Companies will buy back shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may be looking for a controlling stake. Buyback is reverse of issue of shares by a company where it offers to take back its shares owned by the investors at a specified price; this offer can be binding or optional to the investors. The buying back of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buyback shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may be looking for a controlling stake. Reasons for Buyback: Unused Cash, Tax Gains, Market perception, Exit option, Escape monitoring of accounts and legal controls, Show rosier financials, Increase promoter's stake, etc. Methods of Buyback: Share buyback can take place in 3 ways:

1. Shareholders are presented with a tender offer where they have the option to submit a
portion of or all of their shares within a certain time period and at usually a price higher than the current market value. Another variety of this is Dutch auction, in which companies state a range of prices at which it's willing to buy and accepts the bids. It buys at the lowest price at which it can buy the desired number of shares.

2. Through book-building process. 3. Companies can buy shares on the open market over a long-term period subject to various
regulator guidelines like SEBI In both 1 & 2 promoters can participate in buyback and not in 3. Valuation of Buyback: There are two ways companies determine the buyback price: 1st way, they use the average closing price (which is a weighted average for volume) for a period immediately before to the buyback announcement. Based on the trend and value a buyback price is decided In the 2nd way, shareholders are invited to sell some or all of their shares within a set price range. The low point of the range is at a discount to the market price, while the top of the price range is set at a premium to the market price. Investors are given more say in the buyback price than in the above arrangement. Still this method is rarely used. Generally, the price is fixed at a mark up over and above the average price of the last 12-18 months.

RELIANCE INDUSTRIES LTD. SHARE BUYBACK Reliance Industries decided a $2 billion share buyback -- the largest ever in the country's capital market history. The company, whose shares are held by one out of every four Indian investors, plans to spend up to 104 billion rupees ($2 billion) to buy back its shares in a bid to bolster its sagging performance. Reliance's 2012 buyback will begin on Wednesday and close January 19 next year, the company said in a statement Monday. This is Reliance's second buyback since December 2004. The buyback "is expected to enhance overall shareholder value", the company said in a newspaper advertisement. The maximum buyback price will be 870 rupees per share, said the company, whose shares were up 2.1 percent at 812.3 on Tuesday. Cash-rich Reliance's share price slumped by 35 percent in 2011, hit by investor concerns about slowing gas output from its fields off India's east coast, and valuation worries about other still-tobe-explored energy assets. Analysts are concerned about Reliance's future earnings prospects after it reported its first quarterly drop in profit in two years earlier this month. A share buyback will help boost investor confidence and avoid a free-fall in the stock price, analysts say. The share buyback will be carried out through the open market. The oil and energy giant has been scouting for acquisitions and looking to diversify its revenue sources by expanding into financial services, retailing, hotels and communications. It recently announced a foray into the Indian media sector as well as the telecom and broadband sectors. The petrochemical giant has built up a war chest for acquisitions, generating $2 billion through stock sales in 2009, and had cash reserves of more than 745 billion rupees ($14.6 billion) at the end of last year. In 2011, Reliance signed a $7.2-billion deal with BP for the British firm to take a 30-percent stake in its 21 largely unexplored deep water oil and gas fields off India's coast.