Paytm Board Rejects Bonus Share Issuance Proposal
Paytm's board has voted against a proposal to issue bonus shares. The company will instead focus on driving growth and profitability for shareholder value creation.
Fintech firm Paytm's board has decided against proceeding with a proposed bonus share issuance. In a regulatory filing on Thursday, the company stated that its board determined it should prioritize compounding growth and profitability to enhance shareholder value, thus opting not to move forward with the plan at this time.
The decision comes after Paytm's parent company, One 97 Communications, had announced that the board would consider the proposal for what would have been the company's first bonus share issue since its 2021 listing. Bonus shares are typically distributed to existing shareholders for free, increasing the total number of outstanding shares without altering an investor's proportionate ownership.
Paytm announced its first-quarter fiscal year 2027 (Q1 FY27) financial results concurrently with the bonus share decision. The company reported a consolidated net profit of ₹220 crore ($2.6 million USD), marking a 78.8% increase from ₹123 crore in the same quarter last year. Operating revenue grew by 27.6% to ₹2,448 crore.
The board also approved a plan to invest up to ₹100 crore ($1.2 million USD) in its subsidiary Paytm Money through a rights issue. These funds are intended to support the subsidiary's technology stack, capital requirements, and wealth management business expansion. Furthermore, ₹1,686 crore of existing IPO proceeds will be re-deployed to strengthen Paytm's core ecosystem and pursue new business initiatives. The appointment of former Google executive Amitabh Kumar Singhal as a non-independent director was also approved, pending shareholder consent.