'Paytm should buyback at IPO price': Fintech major gets slammed on Twitter over share buyback plan

Paytm's announcement on Thursday that it was considering to repurchase its own shares faced criticism on Twitter even as the fintech major's shares rose 7% on Friday.

The announcement came at a time when the digital payments giant's stock is trading 75% lower than its listing price of Rs 2,100.

Paytm's parent company, One97 Communications, said its board is set to meet on December 13 to consider the buyback proposal without specifying details.

"The management believes that given the company’s prevailing liquidity/ financial position, a buyback may be beneficial for our shareholders," One97 said.

Some Twitter users said the move even shows lack of corporate governance at the company.

"#Paytm should #buyback at IPO price," said a Twitter user.

"How does a company that doesnt have positive cash flow buys back its share??," wondered another Twitter user.

"If Paytm's idea is to support the stock price then they should look at what happened to DLF after the buyback announcement," said another Twitter user.

Some even equated Paytm's announcement with Nykaa's recent decisions regarding share split.

"PayTM doesn’t make money but wants to ‘consider buyback of shares’. Nykaa split the shares and prevented investors from selling. Very good red flags on corporate governance visible here," read a tweet.

"As per latest balance sheet the cash position of #PayTM is around Rs 6000 Crores. In that case #BuyBack will not be more than Rs 1000 Crores which is just 3% of the current market capitalization

Unlikely to make a dent in the stock price. Punters should be careful ramping up stock," tweeted Sandip Sabharwal, a stock market expert.

Also Read: Paytm’s parent firm One 97 Communications to consider share buyback on Dec 13 board meet