Paytm in India plans to buy back shares after a difficult year
Indian financial services company Paytm announced on Thursday evening that it was considering buying back its shares, after a turbulent year that saw its share price fall by more than 60%.< /p>
Paytm said it would discuss the proposed buyback of the company's fully paid shares with the board on December 13, the Noida-based company disclosed in a stock exchange filing.
"Management believes that given the current liquidity/financial situation of the company, a buyout may be beneficial to our shareholders. The outcome of the board meeting will be released to stock exchanges after the close of trading. meeting of the Board of Directors on December 13, 2022, in accordance with the applicable provisions of the SEBI listing rules,” it said in the filing.
Buyouts are not uncommon and are generally seen as a way for companies to reward their shareholders. Many companies have stepped up share buybacks this year, taking advantage of lower prices in public markets globally. But this is not common among loss-making companies.
The move is particularly notable for Paytm, whose shares have fallen more than 65% since listing late last year and have never recovered to the $25.2 issue price. Its shares closed Thursday at $6.2.
Paytm nevertheless sends the signal to the market that it thinks its shares are undervalued.
The company's arch-rival PhonePe, which is also unprofitable and has significantly lower revenues, is at a later stage of deliberations to raise about $1 billion from majority shareholder Walmart and others, including General Atlantic, at a valuation of $12 billion, according to a source familiar with the matter. Indian news outlet MoneyControl first reported on the funding talks last month.
Indian financial services company Paytm announced on Thursday evening that it was considering buying back its shares, after a turbulent year that saw its share price fall by more than 60%.< /p>
Paytm said it would discuss the proposed buyback of the company's fully paid shares with the board on December 13, the Noida-based company disclosed in a stock exchange filing.
"Management believes that given the current liquidity/financial situation of the company, a buyout may be beneficial to our shareholders. The outcome of the board meeting will be released to stock exchanges after the close of trading. meeting of the Board of Directors on December 13, 2022, in accordance with the applicable provisions of the SEBI listing rules,” it said in the filing.
Buyouts are not uncommon and are generally seen as a way for companies to reward their shareholders. Many companies have stepped up share buybacks this year, taking advantage of lower prices in public markets globally. But this is not common among loss-making companies.
The move is particularly notable for Paytm, whose shares have fallen more than 65% since listing late last year and have never recovered to the $25.2 issue price. Its shares closed Thursday at $6.2.
Paytm nevertheless sends the signal to the market that it thinks its shares are undervalued.
The company's arch-rival PhonePe, which is also unprofitable and has significantly lower revenues, is at a later stage of deliberations to raise about $1 billion from majority shareholder Walmart and others, including General Atlantic, at a valuation of $12 billion, according to a source familiar with the matter. Indian news outlet MoneyControl first reported on the funding talks last month.
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