SoftBank-backed Paytm’s CEO Vijay Shekhar Sharma said on Wednesday that going ahead there will be no more cash burn in the business and that the Indian 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,” Sharma said at a newspaper’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 $2.5-billion 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% from its IPO offer price of Rs 2,150. Paytm recently announced a share buyback scheme worth Rs 850 crore at Rs 810 apiece.
The company has opted for the open market route through the stock exchange method for the buyback programme and expects the process to be completed within a maximum period of six months.
Assuming a full buyback of Rs 850 crore, and applicable buyback taxes, the company expects the total outlay will be in excess of approximately Rs 1,048 crore.
At the event, Sharma also said that free Unified Payments Interface (UPI) will bring in more people into the formal economy and have a multiplier effect.
“We believe that this country should keep UPI free till the time…majority of shopkeepers and customers are making payments by digital mobile payment systems…the secondary and tertiary impact of keeping this on (the) economy are dramatically large,” he said.
