Paytm in focus as board considers buyback; IIAS raises key concerns

The buyback proposal comes less than 13 months of Paytm's disastrous listing, which saw its shares tank as much as 80 per cent

One97 Communications’ (Paytm) board will meet on Tuesday to consider a buyback proposal by the loss-making digital payments major. The proposal has taken the market by surprise as share buybacks are typically undertaken by profitable companies to return excess cash to shareholders.
 

“Buybacks signal that the company has strong cash flow generation, which is more than required to maintain the company’s growth trajectory. In Paytm’s case, the company continues to report cash losses annually. Therefore, the buyback is essentially a return of equity capital to its shareholders,” Institutional Investor Advisory Services (IiAS) said in a note.
 

The governance and voting