Paytm Down: The business market does not favor the digital transaction Giant PayTm falls despite its announcement of Rs 850-crore share buyback plan.
Paytm Down: PayTm says that it is about to buy back up to 10.5 million shares of the company with a price of up to Rupees 810 per share
Paytm Down: It was today on 14th of December when Paytm, quickly gave up their opening gains and traded lower inspite of the company’s approval of a Rs 850 crore share buyback plan yesterday on 13th of December 2022.
The company says that it is going to buy back up to 10.5 million shares of PayTm at a price of up to Rs 810 per share. This was much higher than the Rs 650 per share as was expected by the market.
Nevertheless, market participants looked upset expressing disappointment over the route via which PayTm will buyback shares. Paytm says that it will buy back its shares via the open market method, not through the much preferred tender route.
In accordance with the open market method, a company buys back shares via the market, reslutantly shares can be purchased at any price up to the cap as are provided by the company. Being different from the tender route, shareholders can availe their shares for buyback at the fixed price as set by the company.
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As per the tender route fifteen percent of the buyback of shares is reserved only for retail investors, on the other hand no such exemption is applied via the open market route. Several market participants scolded the open market method which is chosen by PayTm thus making the share buyback plan a “non-event”.
With the equal-weight rating on the counter, Morgan Stanley, says that at the current price strata, potentially PayTm could purchaeback up to sixteen million shares.
