Paytm said on Wednesday that going ahead there will be no more cash burn in the business and that the SoftBank-backed digital payments firm was far ahead on re-setting its ambition on controlling spends.
“It has got decided last month that it (cash burn) would no more be continuing. As far as Paytm is concerned, we have publicly declared that we are far ahead of our ambitions — far meaning the border of magnitude ahead — in terms of re-setting our cash burns” founder Vijay Shekhar Sharma said at newspaper Business Standard’s annual banking event.
In November, Paytm said it would become free cash flow positive in the next 12-18 months.
Paytm had net cash, cash equivalents and investable balance of Rs. 9,182 crore at the end of September, according to its latest quarterly earnings report.
CLSA had also upgraded Paytm last month saying that cash burn could end in another four to six quarters.
Formally known as One97 Communications, Paytm listed last year after a mega USD 2.5 billion (roughly Rs 20,000 crore) initial public offer (IPO). Since then, however, the stock has plunged as investors worried about the sky-high valuations of tech companies amid fears of a global economic recession.
As of last close, the stock was down over 75 percent from its IPO offer price of Rs 2,150.
Earlier this month, Paytm said its board unanimously approved a share buyback worth up to Rs 850 crore, as it looks to build investor confidence and shore up its battered stock price.
The buyback will be priced at a maximum of Rs 810 per share, the company said in an exchange filing, adding that it will follow the open market route.
The board believes that the buyback is a “sign of confidence that the company is on a clear path to deliver cash flow profitability”, and that it will not have any impact on Paytm’s growth plans in the near future or on its profitability plans.
© Thomson Reuters 2022
Catch the latest from the Consumer Electronics Show on Gadgets 360, at our CES 2023 hub.