Inquisitive case of Paytm buyback

What is it about?

This case study discusses the unorthodox choice made by Paytm, a leading Indian digital payments and financial services provider, to begin a share repurchase program just one year after its substantial Initial Public Offering (IPO). Paytm encountered difficulties as its stock price experienced a sharp decline of 74% following the initial public offering (IPO), which raised concerns among shareholders and elicited mistrust from analysts. The case explores the reasoning for the buyback, the legislative framework of share buybacks in India, and the diverse viewpoints of analysts regarding the company’s financial strategy. The case provides ample opportunity to discuss ethical issues around managers' corporate actions and brings to the fore the dilemma faced by the investors.

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