Buybacks Dominate Indian Secondary Market

Buybacks dominate in India because they solve the liquidity problem without requiring a true private secondary market. A company can choose the timing, set the price, decide who can sell, and handle the approvals and paperwork in one controlled process. That fits a market where many startups are still formalizing ESOP plans and filings, while broad investor led secondary trading remains much less common than in the U.S.

• In practice, the next most common paths are much narrower, employee to employee transfers, or an incoming investor buying shares from early holders. The interview notes these happen, but far less often than company run buybacks, which is why issuer controlled liquidity is still the default pattern.
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• The bottleneck is not just investor demand, it is operations. Indian companies often still need lawyers, board approvals, standard scheme documents, and ROC filings just to issue and manage ESOPs cleanly. If the base equity workflow is still manual, recurring secondary programs are harder to run.
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• This is the same split seen more broadly in private markets. Smaller one off trades usually match individual sellers with buyers, while mature platforms like Carta and Nasdaq Private Market succeed by running issuer controlled tender offers that preserve cap table control. India is earlier on that same path, with the tender style buyback arriving before an open marketplace.
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The next phase is a shift from occasional company repurchases to structured, repeat liquidity windows. As more Indian startups reach late stage scale, more boards will use controlled secondary programs to retain employees, refresh the cap table, and bring in new investors without issuing new shares. The infrastructure layer that starts with ESOP compliance is what makes that transition possible.