How a Buyback Program is executed?

The buyback has come in lime light once again by virtue of recent announcement of Reliance Buyback which is going to become a reality on coming Friday when its board meets for approval.
There are two options under which a buyback program can be executed. Primarily a company has 2 options for exercising a buyback and same are as listed below:

• The company buys the shares through the stock exchange. In such a program a maximum price is indicated and company buys the shares periodically from share market till the time stock remains below indicated price.
• The companies sends a form to their shareholders on their registered addressed and ask them to tender their shares for the buyback. The company sets up a price at which the shareholders can tender their shares and the company may or may not buy a portion of the shares from the shareholders at this price. The leverage is available with the company that how much they are ready to spend and a share holder can not dictate the terms to them.

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