Entitlement Ratio of Buyback
Entitlement Ratio of Buyback shows the proportion of shares a shareholder is eligible to offer for buyback based on their existing holding.
The Entitlement Ratio determines how many shares a shareholder can tender in a buyback offer relative to the shares they already hold, ensuring fair participation across all shareholders.
Key points:
Expressed as a ratio, such as 1:5
Based on the shareholder's holding on the record date
Helps small shareholders get a proportionate chance versus larger holders
Example:
If the entitlement ratio is 1:10, a shareholder holding 100 shares is entitled to tender 10 shares in the buyback.