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One97 Communication, the parent entity of fintech major Paytm, on Tuesday approved buyback of maximum over 1 crore equity shares of Rs 850 crore at a maximum price of Rs 810 per share.

All directors present voted unanimously in favour of the proposal, including all independent directors, it said in an exchange filing.  

“Approved the proposal to buyback fully paid-up equity shares of face value of Re 1 each of the company at a price not exceeding Rs 810 per equity share (maximum buyback price) and for an amount not exceeding Rs 850 crores excluding any other expenses (buyback taxes and other transaction costs) incurred or to be incurred for the buyback…” it said. 

One97 Communication also said it would be buying back 10,493,827 equity shares at the said maximum buyback price and maximum buyback size i.e. Rs. 425 crores. This represents approximately 1.62% of the paid-up share capital of the company as of March 31, 2022.

The dates of the open market buyback offer shall be mentioned in the public announcement, the company said, along with details of the actual number of shares and information on post-buyback shareholding pattern.

Reiterating that the proceeds from the IPO are not being directed towards the share repurchase plan, the company said the board has determined that there is surplus liquidity that can be productively applied to a buyback of shares.

“Over the last year, there is clear business momentum, and we are ahead of our plans. Looking at the monetisation opportunities in our core payment and credit business, we feel confident to generate healthy revenues and cash flows to invest in sales, marketing and technology. We value our shareholders and their journey with us in the public markets. I believe that a buyback at this stage will be immensely beneficial for our stakeholders and will drive long-term shareholder value,” said Vijay Shekhar Sharma, Founder and CEO, Paytm. 

According to Vijay, the company is ahead of its previously-stated plans to achieve EBITDA before ESOP costs profitability by quarter ending September 2023. “Assuming a full buyback of Rs 850 crores, and applicable buyback taxes, the total outlay will be in excess of approximately Rs 1,048 crores,” he added.