Synopsis
Paytm announced a buyback size of up to INR850 crore and has pegged the maximum price at INR810/share – a significant premium to the current market price of INR534 but 62% lower than the IPO price of INR2,150. Analysts feel this will only favour Paytm’s pre-IPO shareholders, employees, and those who bought the stock from the secondary market at a lower price.
After Nykaa, Paytm is in the news for being on the wrong side of corporate governance. One97 Communications, better known as Paytm, announced a surprise share buyback which hasn’t augured well with analysts. The whole purpose of a buyback is defied by Paytm and goes against the idea of efficient capital allocation. Buybacks are usually associated with companies that are in the business for many years, and are profitable. Analysts now wonder if
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