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Paytm considers share buyback at December 13 board meeting

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wealth desk

To buy to sell One 97 PayTM to share

One 97 Communications Ltd., the parent company of Paytm, will hold a board meeting on Tuesday, Dec. 13 to consider a share buyback, the company said in an exchange filing late Thursday evening.

To date, the company has cash worth over $1 billion on its books, or nearly 25% of its current market capitalization.

Paytm was one of India’s biggest IPOs and went public in November last year at Rs 2,150 per share. The shares are down nearly 70% from their IPO price to fall to an all-time low of Rs 438.35 recently.

The company’s lock-up period for pre-IPO investors ended last month, after which more than 7.5% of equity changed hands with big-name investors including Softbank SVF India Holdings and Alibaba, selling their stake in the company.

Goldman Sachs has one of the highest price targets on Paytm of Rs 1,100 with a buy rating. After the analysts’ meeting, the brokerage said it was encouraged by new information from the company regarding free cash flow and profitability. However, they also mentioned that timelines for merchant resolution and customer onboarding remain unclear.

Another point to note is that despite analysts being supportive, all of their price targets are well below the company’s IPO price.

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