OFS vs buyback: what's the difference? (2026)

On OFS vs buyback: an OFS (offer for sale) is promoters or other shareholders selling existing shares through a separate exchange window, and a buyback is the company buying its own shares and cancelling them. One moves shares from holders to the market, the other takes shares out of existence. As read on 22 October 2026, the buyback rules moved this year: the SEBI (Buy-Back of Securities) Regulations, 2018, amended up to 6 July 2026, brought back open market buybacks through the stock exchange from 1 August 2026, after that route was closed from 1 April 2025. The OFS rules sit in paragraph 19 of SEBI's Master Circular for Stock Exchanges and Clearing Corporations dated 30 December 2024, and SEBI's circular listing shows no newer OFS circular.

OFS vs buyback: who acts, and where do the shares go?

The cleanest way to hold the difference is to track who acts and where the shares and money go. The rules behind each row are as read in the two rulebooks on 22 October 2026:

The 1,000 crore threshold is computed as average daily market capitalisation over the six months before the month the OFS opens (para 19.1.2.2.2). Promoters who need to raise public shareholding to the minimum can use the OFS window whatever the market capitalisation (para 19.1.2.2.1), and may then offer less than 25 crore rupees to do it in a single tranche (para 19.1.3).

Why does a buyback cut the share count and an OFS does not?

Regulation 11 requires the company to extinguish and destroy the shares it buys back, and to finish within seven working days of the end of the buyback period. The shares stop existing, so the total outstanding falls.

The same regulation caps the equity shares bought back in any financial year at 25% of the paid up equity capital, and Regulation 4(ii) keeps secured and unsecured debt at no more than twice paid up capital and free reserves after the buyback. An OFS, by contrast, is a transfer of existing shares from seller to buyer through the exchange, so the count does not move. This is why the two actions pull the shareholding pattern in different ways: a promoter OFS lowers the promoter and promoter group line, while a buyback shrinks the base and can lift the percentage held by those who did not sell.

What changed in the buyback rules in 2026?

The Buy-Back (Amendment) Regulations, 2026, effective 1 August 2026, changed two things a reader of the filings will notice, and a third rule is worth reading beside them:

• The stock exchange route is back. The proviso to Regulation 4(iv)(b) had shut open market buybacks through the stock exchange from 1 April 2025. The amendment limits that bar to 31 July 2026 and, from 1 August 2026, allows the route again at less than 15% of paid up capital and free reserves. The offer must open within four working days of the public announcement and close within 66 working days of opening (Reg. 17(iii)). The open market buyback page covers that route in detail.
• The gap between offers. Regulation 4(vii) used to bar a new buyback offer for one year from the end of the last buyback period. It now refers to the period prescribed under the Companies Act, 2013, counted from the closure of the last offer.
• Who is on the other side (not changed in 2026). A stock exchange buyback cannot buy from the promoters or persons in control (Reg. 16(ii)), and promoters cannot take part in a book building buyback (Reg. 22D(ii)).

In a tender offer, the route that never closed, 15% of the shares the company proposes to buy is reserved for small shareholders, those holding no more than 2 lakh rupees of the shares on the record date (Reg. 6 and 2(i)(n)). A promoter that declares it will not tender is left out of the entitlement ratio (Reg. 4(iv)(a)).

Which disclosure do you read for each?

Both leave a dated public trail, in different places. For an OFS, the seller tells the exchange by 5 pm on the day before the sale (T-1) the number of shares offered and the floor price, and the exchange informs the market at once (paras 19.1.5.2 and 19.1.5.3). For a buyback, the company makes a public announcement and, in a tender offer, files a letter of offer; after the buyback it reports the shares extinguished to the exchanges. The change in ownership from either then shows up in the next quarterly shareholding pattern, which LODR Regulation 31(1)(b) requires within 21 days of quarter end.

Large promoter sales often appear on the tape as well. Flock's filing week page lists the insider trades, bulk deals and stake disclosures filed in the last seven days by the investors Flock tracks, each with its filing date.

So on OFS vs buyback, the takeaway is direction: an OFS is holders selling existing shares through an exchange window, a buyback is the company buying shares in and cancelling them, and since 1 August 2026 a buyback can again run through the stock exchange. The delisting vs buyback page covers a nearby distinction. What either means for your own decision is your call to make.