As the board considers a buyback, Paytm shares increase in Dalal Street.

Paytm stock is down 60% in 2022 following a much-watched debut in the latter part of last year because of concerns about profitability and expenses associated with marketing and employee stock options.

When stock is repurchased, shareholders receive the market value of their shares plus a premium from the corporation, which is a benefit to all shareholders. Additionally, stockholders who sell their shares on the open market will profit directly if the stock price increases prior to the buyback.

An effective stock buyback can maintain stock prices, streamline ownership, and replace dividends, all of which are advantages for companies. Although a repurchase doesn't always benefit investors, it can since investors get their capital back.

Share repurchase plans have always had benefits and drawbacks. The real worth of stock buybacks has been questioned recently, though, since their frequency has increased. According to some corporate finance specialists, firms take advantage of them to artificially boost certain financial figures, such as EPS, in the name of benefiting shareholders.