Paytm surges on buyback plan but analysts flag focus on path to profitability - Reuters

BENGALURU, Dec 9 (Reuters) - Paytm's (PAYT.NS) banal surged implicit 7% connected Friday aft it announced plans to see a stock buyback, but analysts warned it would not bring semipermanent alleviation to investors arsenic concerns astir the Indian firm's dilatory way to profitability remained.

The supplier of integer outgo solutions has seen its banal plunge astir 74% since its mega $2.5 cardinal IPO successful November past year, astatine a clip erstwhile tech stocks satellite implicit took a beating and questions were raised astir Paytm's quality to monetize its platform.

Late connected Thursday, Paytm said it volition see a buyback of shares connected Dec. 13, saying it thinks the determination volition beryllium beneficial for its shareholders "given the company’s prevailing liquidity and fiscal position."

Last month, Paytm said it would go escaped currency travel affirmative successful the adjacent 12-18 months.

"This institution is yet to marque profits but its successful a hurry to denote a buyback," said Chokkalingam G, Founder, Equinomics Research & Advisory Pvt Ltd, adding that Friday's banal surge was an accidental to exit the counter.

Paytm did not respond to a Reuters petition for comment. As immoderate radical criticized its plans connected Twitter, the institution defended the determination saying it ever takes "decisions keeping the semipermanent involvement of our shareholders successful mind."

The buyback plans travel arsenic respective exertion stocks successful India look unit amid a rising involvement complaint situation and concerns implicit valuations. SoftBank-backed Indian e-commerce steadfast Snapdeal connected Friday said it volition pull the plug connected its $152 cardinal IPO plans owed to unfavorable marketplace conditions.

Shriram Subramanian, managing manager of Bengaluru-based firm governance advisory steadfast InGovern Research Services, said Paytm's investors should absorption connected its semipermanent fundamentals.

"Investors should look astatine however the institution is capable to marque wealth from their business, the way to profitability and erstwhile volition they go profitable alternatively than focusing connected the buyback," Subramanian said.

Reporting by Nallur Sethuraman and Akansha Victor; Editing by Aditya Kalra and Nivedita Bhattacharjee

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