One 97 Communication Limited (Paytm) Buyback 2022

i. One 97 Communications was started in 2000, which launched Paytm in 2009, as a “mobile-first” digital payments platform to enable cashless payments for Indians, giving them the power to make payments from their mobile phones.

ii. It offers consumers a wide selection of payment options on the Paytm app, which include
(i) Paytm Payment Instruments, which allows to use digital wallets, sub-wallets, bank accounts, buy-now-pay-later, and wealth management accounts.
(ii) Major third-party instruments, such as debit and credit cards and net banking.

iii. The company’s ecosystem serves 333 million consumers and over 21 million merchants.

Competitive Strengths
i. Trusted brand, scale and reach
ii. Deep insights of Indian consumers and merchants
iii. Leadership and our distinctive culture

Buy Back Offer Deal:

Buyback Type: Open Market
Buyback Opening Date: Dec 21 2022
Buyback Closing Date: Feb 13 2023
Buyback Offer Amount: ₹ 850 Cr
Date of Board Meeting approving the proposal: Dec 13 2022
Date of Public Announcement: Dec 13 2022
Buyback Offer Size: 6.67%
Buyback Number of Shares: 1,04,93,827
Price Type: Open Market
FV: 1
Buyback Price: ₹ 810 Per Equity Share

Details of Buyback:

The Board of Directors of the company at its meeting held on i.e. 13.12.2022 considered and approved the proposal for buyback of fully paid-up Equity Shares of the face value of Rs.1/- not exceeding 1,04,93,827 Equity Shares (representing 6.67% of the total number of equity shares in the paid-up equity share capital of the Company) for an aggregate amount of Rs.850 Cr Only, of the total paid-up equity share capital and free reserves of the company as on March 31, 2022 at a price of Rs.810 on "Open Market Basis"

Salient financial parameters:

Particulars ( in Cr) Mar 2016 Mar 2019 Mar 2020 Mar 2021 Mar 2022
Sales + 855 3,224 3,279 2,801 4,972
Expenses + 2,523 7,592 5,964 4,640 7,356
Operating Profit -1,668 -4,368 -2,685 -1,838 -2,384
OPM % -195% -135% -82% -66% -48%
Other Income + 164 280 -45 356 288
Interest 1 38 54 38 42
Depreciation 28 112 174 178 247
Profit before tax -1,534 -4,237 -2,958 -1,698 -2,385
Tax % 0% 0% 1% 0% 0%
Net Profit -1,535 -4,231 -2,942 -1,701 -2,396
EPS in Rs -331.99 -726.78 -470.27 -280.42 -36.9

How to Participate in buyback?

In this method of share Buyback, the company will be purchasing stocks from existing shareholders of the company directly from the market. Example: “One 97 Communication Limited” announces buyback plan of its shares up to value of Rs810, it means that the company will be purchasing shares of "One 97 Communication Limited” from the open market not exceeding Rs. 810 per share. Scenario 1- If the share price is below Rs. 810 in that case, the company will put buy order at Current Market Price and purchase shares. Scenario 2- If the share price is above Rs.810, in that case, the company will put buy order at Rs. 810 only and if someone is ready to sell at that price or less then only company will get back shares.

Profit from the buyback on the bases of acceptance Ratio:

It is an Open market Buyback, so no arbitrage is available.

9 Comments

    Sumit ji,

    The price of the Cosmo first is declining drastically. Do you have any idea/ information regarding the price. Thank you.

    Reply

      Hello SRK Ji, Cosmo First was not Ok for me… But the reason of fall seems to be the record date 13/12/2022. I think it may raise near to the the actual buyback…
      For me 31% public holding was a show stopper…
      Thanks

      Reply

        Sumit ji,

        Somehow I have forgotten the Record Date. Thank you for your kind views. All the best.

        Reply

          Sir,

          I am under the impression that the Record Date is 14/12/2022. I may be wrong. Please confirm. Thank you.

          Reply

      Sir,
      Thank you very much for your kind views. Please continue to help the readers with your valuable suggestions regarding all the Buybacks. God blesses you with all the best.

      Reply

    Loss making company can come up with a buyback to the size of 10% of Net-worth.

    Reply

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