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

Paytm's parent company One 97 Communications Limited is considering going for a share buyback in a board meeting on December 13, an exchange filing by the company stated on December 8.

The homegrown payments app's parent company came under pressure a few weeks back when its investor Softbank launched a block deal to sell shares worth around $200 million after the lock-in period for pre-IPO investors ended. SoftBank owns 12.9 per cent of Paytm and said it plans to sell 29 million shares or 4.5 per cent of the fintech company.

Under a share buyback process, a firm buys back its shares from investors or shareholders generally at a price higher than the market price.

In its regulatory filing today, the fintech company said: “Pursuant to Regulation 29 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (“SEBI Listing Regulations”), we wish to inform you that a meeting of the Board of Directors of the Company is scheduled to be held on Tuesday, December 13, 2022, to consider a proposal for buyback of the fully paid-up equity shares of the Company, in accordance with the applicable provision under the Companies Act, 2013 (including the rules and regulations framed thereunder), the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018 (as amended), and other applicable laws.”

The statement added: “The management believes that given the Company’s prevailing liquidity/ financial position, a buyback may be beneficial for our shareholders. The outcome of the Board meeting will be disseminated to the stock exchanges after conclusion of the Board meeting on December 13, 2022, in accordance with the applicable provisions of the SEBI Listing Regulations.”

Paytm debuted on the bourses on November 15, 2021, after raising a whopping amount of Rs 18,300 crore in an initial share sale. It was the second biggest IPO in India.

But Paytm’s journey so far as a publicly traded firm has been choppy. The stock slumped 27 per cent on market debut from its issue price of Rs 2,150 apiece.

On Thursday, Paytm’s shares closed at Rs 508.20, down by 0.33 per cent from yesterday’s price.