Fintech major Paytm's bid to undertake its maiden bonus issue of shares hit a speed bump after its board voted against the proposal.
In a filing with the exchanges, the fintech giant said that its board has decided not to proceed with the proposal "at this time".
Paytm's board, after evaluating the plan, noted that the company should instead focus on further compounding growth and profitability for shareholder value creation.
"After evaluating the proposal from the perspective of long-term shareholder value and due deliberation, the board was of the view that the Company should continue to focus on further compounding growth and profitability for shareholder value creation. Accordingly, the Board decided not to proceed with the said proposal at this time," Paytm informed the bourses.
This comes days after the fintech giant's parent One 97 Communications announced that its board would consider a proposal for the first-ever bonus issue of shares. If approved, this would have become Paytm's first bonus issue since its listing in 2021.
Bonus shares are additional given to existing shareholders by a company for free. They increase the outstanding shares but do not change an investor's ownership in the company. It is pertinent to note that Paytm had not disclosed the proposed bonus ratio or the record date.
The announcement came as Paytm announced its Q1 FY27 results. The company's consolidated net profit zoomed 78.8% to ₹220 Cr in Q1 FY27 as against ₹123 Cr in the year ago quarter. Meanwhile, operating revenue for the quarter under review stood at ₹2,448 Cr, growing 27.6% from ₹1,918 Cr in Q1 FY26.
Alongside its financials, the financial major's board also approved an investment of up to ₹100 Cr in its wholly-owned subsidiary, Paytm Money, via a rights issue to support its tech stack, capital requirements and the expansion of its wealth management business.
In addition, the board also approved a plan to re-deploy the remaining ₹1,686 Cr of its IPO proceeds to strengthen Paytm’s core ecosystem and pursue new business initiatives. The fintech major's board also approved the appointment of former Google executive Amitabh Kumar Singhal as a non-independent director on the company's board. Both of these proposals shall be subject to shareholder approval.
Shares of Paytm closed today's trading session 0.04% lower at ₹1,348 on the BSE.