NISM Certifications · NISM-Series-VI: Depository Operations · Special Services - Public Offering / Corporate Actions
A listed company announces a buyback through the tender offer route. A shareholder wishing to tender his demat shares must typically do which of the following?
The shareholder places a bid through his stock broker and the demat shares are transferred to, or blocked for, the clearing corporation. Accepted shares are bought back and extinguished, while unaccepted shares are returned to his account.
- ASend physical share certificates to the company
- BPlace a bid through his broker, and transfer the shares to the clearing corporation's designated account or have them blockedCorrect
- CClose his demat account before the offer opens
- DRequest the DP to convert the shares into a mutual fund unit
Explanation
In a tender offer buyback, a shareholder tenders shares through a stock broker, and demat shares are transferred to or blocked in favour of the clearing corporation until acceptance is determined. Accepted shares are extinguished; unaccepted shares are returned. Physical certificates, account closure and unit conversion are not part of the process.
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