Abstract
In India, there are about 6 companies who have treasury stock. Such companies are Reliance Industries, JP Associates, Mahindra & Mahindra, BPCL, IOC and United Spirits. In case of IOC, there are two such trusts.In India, the treasury stock gets created in the case of Mergers & Acquisitions wherever there is involvement of 'cross holding' between the acquiring company and target company.Globally, treasury stock may also get created due to the Buyback of shares. However in India, the treasury stock won't arise at the time of buyback because the shares that have been bought back by the company at the time of Buyback need to be extinguished as per the Companies Act.Hence in India, the chances of creation of the treasury stock arise only in the case of Mergers & Acquisition between two companies with 'cross holding'. And, such treasury stock will be held in a separate trust.These companies with treasury stock hold this distinct advantage. This may encourage them to look at the opportunity of sale of these treasury stock at appropriate time.
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