Paytm Parent One97 Communications Successfully Completes Share Buyback via Open Market
One97 Communications, the parent company of Paytm, has announced the successful completion of its share buyback program within three months of announcing it. The buyback was conducted via the open market, and despite the stock price remaining below the company’s buyback price, One97 Communications was able to purchase the shares smoothly.
On December 13, 2022, Paytm’s parent company announced its decision to buy back shares worth Rs 850 crore at Rs 810 a share through the open market. The buyback process began on December 21, 2022, and concluded on February 13, 2023, during which the company bought back 1.56 crore shares for Rs 850 crore.
Despite the stock price fluctuating between Rs 500 and Rs 690 during the buyback process, shares of the fintech giant have appreciated by over 26% since then. However, the share buyback through the open market is more favourable for companies rather than shareholders, as the company buys its shares from the open market at the market price.
Before the share buyback, One97 Communications’ shares had declined by over 60%, hitting a lifetime low of Rs 438.35, causing several pre-IPO stakeholders to offload their holdings to curtail their losses in investments. Among these investors were Softbank Group and Alibaba Holdings, with the latter’s affiliate, Alibaba.com Singapore E-Commerce, exiting the fintech company through the sale of its entire 6% stake.
While the buyback was successful for One97 Communications, shareholders could have made a profit on their investments if the buyback was conducted via the tender offer route, allowing them to tender at a premium. Nevertheless, the company’s successful buyback via the open market is an indication of its efforts to strengthen its financial position and regain the confidence of its stakeholders.
For More Latest News Click Here
