There are several factors that influence a firm's choice between paying dividends or repurchasing shares. Some key reasons for share repurchases include signaling undervaluation to the market, adjusting capital structure, and addressing agency costs through distributing excess cash flows. Indian regulations allow share repurchases up to 25% of paid-up capital and free reserves using sources like free reserves and securities premium. Firms like Britannia Industries have opted for repurchases to return surplus cash to shareholders and offer an exit opportunity without significantly impacting share prices.