When a company is sitting on more cash than it needs, instead of keeping it idle, it decides to hand it back to shareholders by buying its own shares. 

It announces buyback to its shareholders including buyback price and the total size, and also files for SEBI approval. Once it receives buyback approval, it announces the record date of the buyback, the cutoff to be eligible. If you hold shares on or before the record date, you can participate in the buyback program. 

Once the window opens, you simply tender your shares through your broker. They get blocked in your demat account while the process plays out. 

Here's the catch, if too many shareholders tender, the company can't buy everyone out fully. So, it applies a pro-rata acceptance ratio. But retail investors get a slight edge: SEBI mandates that at least 15% of the buyback is reserved for them. 

Once it's all settled, accepted shares are permanently cancelled, proceeds hit your bank account, and any unaccepted shares quietly come back to your demat, untouched.