Paytm Announces Rs 850 Crore Share Buyback At 50% Premium For Stakeholders
December 16, 2022: The Vijay Shekhar Sharma-led Paytm buyback will require at least 50 percent of the amount set as the maximum buyback size, ie Rs. 425 crore will be used.
Rs. 850 crore assuming a full buyback and applicable buyback tax, the total cost would be approximately Rs. 1,048 crore will be over.
Paytm parent One97 Communications, in November 2021 its Rs. 18,300 crore IPO, after the stock plunged 75 per cent, on Tuesday announced that its board through the open market will issue Rs. Allowed buyback of shares up to 850 crores.
The amount is slightly more than a third of what investors paid a year ago in the country’s largest IPO. The payments company, led by Vijay Shekhar Sharma, said it has raised Rs. 810 will buy back the shares,
A steep 62 percent discount to the IPO price of 2,150 but a 50 percent premium to Tuesday’s closing price.
At the maximum buyback price and maximum buyback size, the indicative maximum number of equity shares to be repurchased will be 10,493,827, representing approximately 1.62 percent of the paid-up share capital of the Company as of March 31, 2022.
Rs. 850 crore assuming a full buyback and applicable buyback tax, the total cost would be approximately Rs. 1,048 crore will be over.
At least 50 percent of the amount Paytm has set as the maximum buyback size i.e. Rs. 425 crore will be used.
Based on the minimum buyback size and maximum buyback price, the payment firm will purchase a minimum of 5,246,913 equity shares.
“Witnessing the pace of Paytm’s financial performance, clear path of cash flow generation and resulting surplus cash, the board has decided that buyback of the company’s shares would be attractive to its shareholders,” the company said in a statement.
The Paytm board believes the buyback is a sign of confidence that the company is on a clear path to deliver cash flow profitability, and the buyback will not impact its growth plans or its profitability plans in the near future, it added.
Until the buyback period is over, the company’s directors and key management personnel – Vijay Shekhar Sharma (founder and CEO) and Madhur Deora (executive director, president and group CFO) – will not participate in any sale of shares.
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