India Gelatine & Chemicals said in a regulatory filing that it has bought back 23.07 lakh shares worth Rs 27 crore. The offer was subscribed by 2.09 times with investors returning 48.17 lakh shares. The buyback was made under the tender offer route. Vivro Financial Services was the manager to the buyback. Post-buyback, promoters’ holding has been reduced from 67.58% to 63.68%. Buybacks appear to have become the preferred route for companies to return wealth to shareholders, especially since dividend income, of over Rs 10 lakh per annum, is taxable at 10% in the hands of all residents, domestic companies, trusts or funds except those established for religious, educational or charitable purposes. The government is also using the buyback route to tap the coffers of cash-rich PSUs ; it hopes to be able to meet its divestment target this way. Of the Rs 46,246.58 crore raised by the government through the disinvestment route in 2016-17, nearly Rs 19,000 crore after state undertakings offered their shares in buybacks. Buybacks are the process by which companies repurchase their shares from stakeholders. The bought-back shares are extinguished shrinking the firms’ equity base.