But all that is in the short term. In the long term, and in a broader sense, share buyback will be a blessing for domestic companies. It removes an anomaly that existed in corporate law, whereby a company could buy back its listed debt through open-market operations, or through a tender for the same without any notice, keeping only its pecuniary interests in mind. But the same flexibility wasdenied to equity capital, except after following a long and arduous process, despite the fact that the only difference between debt and equity is the permanency of capital.

Buyback should not be viewed in terms of only share prices and shareholder value. Its primary purpose is to serve as a vital corporate-finance tool for overcapitalised companies and as a defence against takeovers. But other than that, for a developing economy like India, it will be strange to expect its companies, which should be growth-oriented, to effect a buyback just because there is a public clamour for the same. Free cash can, and should be put to better use.