India’s leading digital payments and financial services company Paytm said that it strongly disagrees with comments and speculations from renowned advisory firms regarding the company’s financial performance and proposed share buyback plan.
The company reiterated that with respect to the buyback proposal, it will fully comply with the statutory framework and regulations that govern the formulation of a share buyback plan. The decision whether or not to approve it will be made by Paytm’s board after a due diligence.
Paytm’s plan for a buyback is driven by its strong financial performance and liquidity. It reiterates that IPO funds cannot be used for a buyback and the company will be using its ample liquidity from pre IPO, if the buyback is approved by the board.
With respect for the necessary processes involved in the buyback, Paytm encourages all stakeholders to wait for the outcome of the board’s decision and details, which will be shared with the exchanges first.
As a responsible organization, the company has carefully considered all relevant factors and is committed to its profitability plans, and driving long-term value for shareholders.
Paytm spokesperson said, “We strongly disagree with the approach of speculating on the drivers and outline of a buyback without waiting for the outcome of a Board decision. While tabling a proposal for a buyback, the company has ensured that there is surplus liquidity, which means that all cash requirements are adequately budgeted. The management is confident of strong operational performance and remains focused on building long-term value for its shareholders. We would also like to take this opportunity to share that the company cannot use IPO funds for any proposed buyback, as it is not allowed as per regulations.” The company has a strong track record of growth, as demonstrated by the Operating Performance Update for October and November 2022. Consumer engagement is at its highest on Paytm Super App with average monthly transacting users (MTU) at 84 million for the two months ended November 2022, up 33% year-on-year. The company has strengthened its leadership in offline payments with over 5.5 million devices deployed. Paytm’s loan distribution business continues to witness accelerated growth with disbursements at an annualised run rate of ₹39,000 crore in the month of November.
