Online financial services firm, One 97 Communications, the parent company of Paytm, has said its board will meet on December 13 to consider a proposal for share buyback keeping in mind the company's liquidity position which may be beneficial for its shareholders, reported by the PTI.
According to its last earnings report, Paytm has a liquidity of Rs 9,182 crore. The company's revenue in the last quarter was Rs 1,914 crore.
Liquidity of a company is measured by its ability to covert assets into cash.
"The meeting of 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," Paytm said in a BSE filing. "The management believes that given the company's prevailing liquidity/financial position, a buyback may be beneficial for our shareholders," the filing said.
The company in its recent analyst meeting, where it had outlined key growth drivers, had said that it expects to become cash flow positive in the next 12-18 months.
Paytm got listed in the stock exchange in November 2021. Paytm allotted its shares at Rs 2,150 apiece, valuing the company at Rs 1.39 lakh crore, but it started trading at Rs 1,950 apiece. The stock touched an all-time low of Rs 441 last month.
On Friday, the shares of Paytm were trading at Rs 542.90, up 6.79 per cent on the BSE.
Meanwhile, the fintech firm sounded optimistic on its growth prospects and reasserted its guidance on turning profitable at an operating level next year. Paytm has been a thumps up by several brokerage firms after the company management’s presentation.
Analysts at Morgan Stanley noted that the top management doesn’t see any significant risk to its payment margins with respect to regulations, adding that net payment margins should remain broadly steady, while adding that the management also remains confident about Paytm’s loan distribution business, which has been gaining significant growth traction over the past few quarters