SoftBank-backed fintech firm Paytm said that going ahead there will be no more cash burn in the business. Its founder, Vijay Shekhar Sharma, at an annual banking event, said that the company was far ahead on re-setting its ambition on controlling spends.
“It has got decided last month that it (cash burn) would no more be continuing. As far as Paytm is concerned, we have publicly declared that we are far ahead of our ambitions — far meaning the border of magnitude ahead — in terms of re-setting our cash burns,” Sharma said. In November, Paytm said it would become free cash flow positive in the next 12-18 months.
According to its latest quarterly earnings report, Paytm had net cash, cash equivalents and investable balance of Rs 9,182 crore at the end of September.
CLSA had upgraded Paytm last month saying that cash burn could end in another four to six quarters. Earlier, this month One97 Communications-the parent entity of Paytm, approved a share buyback plan of Rs 850 crore, priced at Rs 810 per share.
“The company will undertake the buyback of up to Rs 850 crore (excluding buyback taxes and other transaction costs) at a maximum price of Rs 810 per share, and has opted for the open market route through stock exchanges method, which is to be completed within a maximum period of 6 months,” it informed the stock exchanges.
At the maximum buyback price and the maximum buyback size, the indicative maximum number of equity shares bought back would be 10,493,827, Paytm said.
The company got listed last year after a mega Rs 18,3000 crore initial public offer (IPO). Since then, the stock has plunged as investors worried about the sky-high valuations of tech companies amid fears of a global economic recession.
At 3 pm on Thursday, shares of One97Communications were trading at Rs 507.20 apiece, down 1.93 per cent on the BSE.