Paytm stock price up by more than 2%, ahead of buyback proposal

13 Dec 2022 , 01:54 PM

Paytm shares gained as much as 3% in Tuesday’s trading session, as the company’s board meeting to consider the share buyback proposal is scheduled for later in the day.

In an exchange filing last week the company stated, “the management believes that a buyback may be beneficial to the company’s shareholders given the company’s current liquidity/financial position.”

According to reports, Paytm cannot use the proceeds of its initial public offering (IPO) for the proposed repurchase of its own shares because rules prohibit such a move, and the firm will instead use its strong liquidity for the purpose. According to its most recent earnings report, Paytm has a liquidity of Rs9,182 crore.

Given its net worth of Rs13,564 crore, Paytm’s maximum tender buyback can be Rs3,391 crore and its maximum open market buyback can be Rs2,035 crore. According to ET Now, if Paytm wants to avoid a special resolution, it will have to conduct a buyback of less than 10% of its net worth, which is close to Rs1,356 crore.

At around 1.51 PM, Paytm was trading 1.82% higher at Rs538.35, against the previous close of Rs528.75 on NSE. The counter hit an intraday high and low of Rs543.50 and Rs533.25 respectively.

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