Indian digital payments leader Paytm is initiating a share buyback of up to $103 million in an effort to stabilize a stock price that has been declining since its IPO last year.
The Paytm board has approved a plan to repurchase up to 10.5 million shares at 810 rupees each, reflecting a 50% premium over Tuesday’s closing price, yet a 62% discount compared to the November 2021 IPO price of 2150 rupees.
Paytm secured approximately $2.5 billion in India’s largest IPO when it debuted on the Mumbai stock exchange. However, the shares plummeted more than 27% on the first day of trading and have continued to falter since then.
Founded in 2009 as a digital payments platform, Paytm has been a leader in India’s transition to digital finance and has expanded into new sectors such as credit cards and wealth management in recent years.
Despite this growth, profitability has remained a challenge; for the quarter ending in September, the company reported a net loss of 5.7 billion rupees, despite a significant 76% increase in revenues.
CEO Vijay Shekhar Sharma stated: “Over the last year, there is clear business momentum, and we are ahead of our plans. Looking at the monetization opportunities in our core payment and credit business, we feel confident in generating healthy revenues and cash flows to invest in sales, marketing, and technology.”