The company's board approved a plan to spend up to $127 million to buy back its shares, as the Indian financial services firm looks to calm investors after a tumultuous period.
The firm, which went public late last year, made a proposal last week that saw its shares increase in value. The share ended the day at over 6 dollars.
The board members unanimously approved the firm's proposal to buy back fully paid-up equity shares at a price not exceeding the Indian rupee's value.
Companies often buy back stock in order to reward their shareholders. Many firms have increased their share purchases this year in order to take advantage of the falling prices. It is not common among firms that make money.
We are ahead of our plans over the last year. We feel confident in generating healthy revenues and cash flows from our core payment and credit business. The journey of our shareholders is valued by us. The founder and chief executive of Paytm said in a statement that he believes that a buy back will be beneficial for stakeholders and will drive long-term shareholder value.
Money from its books will be used to buy back the shares. The firm can't use the proceeds from the IPO to buy back stock. In a statement earlier Tuesday, the company said it has adequate cash requirements.
It said that the management is focused on building long-term value for its shareholders. At the end of September, the company had more than one billion dollars in the bank.
According to a source familiar with the matter, PhonePe is in the process of raising $1 billion from Walmart and others, at a valuation of $12 billion. MoneyControl reported about the funding talks a month ago.
The market cap of the company is about $4.2 billion.
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