India’s digital payment system Paytm, owned by SoftBank, will buy shares worth eight and a half billion rupees, or $103.06 million, from its customers. The company has taken this initiative to increase the confidence of investors and increase the share price. News Reuters.
On Tuesday, Paytm’s board gave the approval to buy back shares from customers.
In a share buyback or repurchase, a firm buys its own shares from investors or shareholders at a price usually higher than market value. It is considered as an alternative way to return money to shareholders.
Each share will be bought for a maximum of Rs. 810, the company said, which is almost double the share price at the end of the day on Tuesday. Open market route will be followed for buying shares. Paytm said this in an exchange filing.
Shareholders will benefit from the buyback given the authorities’ belief, current liquidity or financial position of the company.
