Shares of One97 Communications Ltd., the parent of Paytm, fell after opening firm on Wednesday after its board approved a share buyback worth Rs 850 crore.
The parent of the payments platform will repurchase 1.049 crore equity shares, representing 1.6% of the total paid-up share capital, according to an exchange filing.
It will repurchase shares on the open market for up to Rs 810 per share, a 50% premium over the previous day’s closing price.
Shares of the company erased opening gains and fell 1.02% to Rs 533.9 as of 9:50 a.m., compared with 0.43% gains in the benchmark Nifty 50. The company’s plan to buyback shares came under scrutiny from analysts, who termed it an “attempt to manage the stock price”.
Of the 12 analysts tracking Paytm, eight maintain a ‘buy’, three suggest a ‘hold’ and one recommends a ‘sell’, according to Bloomberg data. The 12-month consensus price target implies an upside of 66.2%.