The board of One97 Communications Ltd on Tuesday approved a Rs 850-crore share buyback proposal at a premium of over 50 per cent to the current market price.

The shares will be bought from the open market. In a late evening regulatory filing to the stock exchanges, the Paytm parent said that its board has approved a proposal to buy back at a maximum price of Rs 810 per share and for an amount not exceeding Rs 850 crore excluding any other expenses incurred or to be incurred for the plan such as filing fees payable to Sebi, stock exchanges fees, advisors’ fees and publication of public announcement.

The maximum price of Rs 810 per share is a premium of 50.13 per cent to the closing price of the Paytm scrip on the BSE on Tuesday.

Market circles said that the buyback price announcement is likely to lead to a strong rally in the shares of Paytm on Wednesday.

The One97 Communications scrip closed at Rs 539.50 on the BSE on Tuesday. Paytm said that at the maximum buyback price and size, the most number of equity shares bought back would be 1.04 crore shares which represent close to 1.62 per cent of the paid-up share capital as of March 31, 2022.

The company said all directors who were present voted unanimously in favour of the proposal, including all of the independent directors. It further said that the buyback programme will be completed within a maximum period of six months.

“Witnessing Paytm’s momentum of financial performance, clear path to cash flow generation and excess cash as a result, the board has determined that a buyback of the company’s shares would be accretive for its shareholders,” the company statement said.