Paytm Buys Back 1.55 Crore Shares for INR 850 Crore, Concluding Its Buyback Plan
- ByStartupStory | February 16, 2023
One 97 Communications, the parent company of Paytm, has disclosed in its filings on February 14 that it has repurchased shares worth INR 849.83 Cr at an average price of INR 545.93 per share. The company has bought back 1.55 Cr equity shares, equivalent to 99.98% of the maximum buy-back size, at prices ranging from INR 702.65 to INR 480.25 per share. This move is a significant development for the fintech major.
Paytm has stated in its exchange filing that its Buy-back Committee, authorized by the company’s Board of Directors, has approved the closure and completion of the buy-back on February 13, 2023. This decision was made in accordance with the terms of the public announcement, which means that it was completed before the expiration of the six-month period from the start date. The announcement of the buy-back’s completion is a significant development for Paytm.
Last year on December 13, Paytm’s board gave the green light to the company’s plan to launch a share buyback worth up to INR 850 Cr from the open market. This buyback equates to 6.67% of the total paid-up share capital as of March 31, 2022. During the share buyback period, Alibaba.Com Singapore E-Commerce Private Limited sold all of its 4 Cr shares, representing a 6.26% stake in Paytm, in two tranches, thus exiting the company. This news is significant for Paytm and its shareholders.
In January, Alibaba conducted a bulk deal to sell almost 2.96% of its direct stake in Paytm, and last week, it sold the remaining 3.31% stake through a block deal worth INR 1,377.5 Cr. As of December 2022, Alibaba-backed Antfin Netherlands Holding had a 24.86% stake in Paytm, or 16.1 Cr shares. Amidst the sale of shares, Douglas Feagin, Ant Group’s senior vice-president, resigned as a non-executive, non-independent director of Paytm earlier this month. This development is notable for Paytm and its stakeholders.
As of 1:30 PM IST on Wednesday, Paytm’s shares on the BSE were trading down 0.9% at INR 637. Notably, the company’s share buyback proposal previously raised concerns about whether it was intended to compensate major institutional investors after the value of its shares plummeted in the year following its IPO. The advisory firm Institutional Investor Advisory Services (IiAS) publicly questioned Paytm about how it could manage with less cash after the buyback, raising additional queries about the company’s strategy. This information is noteworthy for investors and other stakeholders of Paytm.
Paytm has reported a reduced net loss of INR 392.1 Cr in Q3 FY23, compared to the same period the previous year. The company has achieved EBITDA positivity earlier than expected, before ESOP cost. This is a significant development for Paytm and its stakeholders.
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