Paytm, may not be able to use proceeds of its mega initial public offering (IPO) for the proposed share buyback plan.
The fintech firm cannot use the proceeds as rules restrict such a move, news agency PTI reported quoting sources. Rather, Paytm will use its liquidity for the purpose.we wish to inform you that a meeting of the Board of Directors of the Company is scheduled to be held on Tuesday, December 13, 2022 to consider a proposal for buyback of the fully paid-up equity shares of the company…,” Paytm said in a regulatory filing with the stock exchanges.
There has been a buzz that the company is using its IPO funds for the buyback, which is prohibited as per regulations. A listed company can use IPO proceeds only for the specific purpose it is raised for and that too is monitored.
Paytm had in November last year boosted ₹18,300 crore through the IPO.
While the company had last month said it would become free cash flow optimistic in the next 12-18 months.