One company -- Assambrook -- has even withdrawn a resolution on buyback which was proposed before the annual general meeting last week following the SEBI's diktat on certain resolution related to the period of buyback and other complicated guidelines. ``There is no attraction in going for buyback under the current rules and in the present circumstances,'' said the chief of a consumer durables firm.

Over 300 companies, including the Tatas, the Birlas and Reliance, had passed resolutions -- taken shareholders permission -- at their AGMs last year. This is meaningless as these companies will have to go back to the shareholders and convene extraordinary general meetings again as per the new guidelines.What has added to the woes of companies is that they will have to make more disclosures and shareholders were given more involvement in pricing of the shares.

Some of the leading merchant bankers have prepared lists of potential companies with good reserves, but inquiries reveal that only less than a dozen of out of 300 companies will really pursue the buyback move in right earnest. Merchant bankers rule out the possibility of listed public sector companies like HPCL, BPCL, ONGC, Indian Oil, BHEL or IPCL to come out with buyback plans. Moreover, many of these public sector companies are in the core sector and need funds to finance their ongoing projects. On top of this, they need sundry permissions from various government agencies.

This is also the case with even private sector companies like Reliance. For example, it doesn't make sense for a company like Reliance to announce a buyback of 10 per cent of the equity capital of over Rs 932 crore. This means the company will need at least Rs 1,000 crore tofinance the buyback of 10 per cent -- nearly Rs 93 crore -- at a price of Rs 120 (the prevailing market price). The company has several ongoing projects and needs money.

Only multinational companies which are keen to hike their stakes in Indian ventures and promoters with low equity holding will seriously think about buyback (as promoters are not allowed to participate in buyback, their stake will increase once the company buys back shares from other shareholders). Even then most of the MNCs -- with exceptions like BAT in ITC -- have already hiked their stake to 51 per cent in Indian ventures. Among the major groups, only the Tatas (with low promoter equity holding in group companies) will benefit from buyback.

With many industry segments facing demand recession and blue chips like Telco reporting losses in the last quarter, the time is not ready for many of the companies to look at the buyback option. ``Shareholders will not agree for any buyback of shares below the ruling market price. In a bearishmarket, it is not sensible to boost the share price and EPS by buyback,'' said the partner of an auditing firm, adding, companies should look at options like retiring high-cost borrowings instead of shelling out money on buyback.

Most of the Indian companies are big borrowers from banks and financial institutions. They are not in a position to raise funds from the capital market and many projects are lying unfinished for want of funds. There is no wonder that many business groups and chambers who were singing hosannahs to buyback in the last one year are now privately murmuring about the stiff conditions related to the facility.