Paytm Shares Slip Despite Rs 850 Cr Share Buyback Approval: Board Meeting Results
By Malvika Gurung
Investing.com — The financial services company Paytm (NS:) announced a share buyback of up to Rs 850 crore after its board meeting on Dec 13, 2022.
In a bid to anchor its stock from collapsing, Paytm’s board, including all the directors and independent directors of the company voted unanimously in favour of a share buyback proposal.
According to the company’s filing to the stock exchanges, Paytm will buyback a maximum of 10,493,827 equity shares of the company at a price of up to Rs 810 apiece for an amount not exceeding Rs 850 crore, excluding a buyback tax.
Despite announcing a share buyback at a price much higher than anticipated by the market, shares of the digital wallets major declined nearly 2% on Wednesday.
The maximum buyback size represents approximately 1.62% of the paid-up share capital of the company as of March 31. Paytm will use at least 50% of the maximum buyback size, i.e. Rs 425 crores, termed as the minimum buyback size.
At this price, the company has stated to buy at least 5,246,913 equity shares.
None of Paytm’s directors and key management personnel shall sell any shares during the buyback period, the company’s filing stated.
The buyback will be conducted through the open market route instead of the preferred tender route and is likely to complete within a maximum of 6 months.
Under the open market route, the actual number of shares that would be bought back and the post-Buyback shareholding pattern cannot be ascertained.
Since its debut on the Indian stock market in Nov 2021, Paytm’s shares have been declining, giving returns of nearly negative 75% to its shareholders.