Employees at One97 Communications, the parent firm of Paytm, have been issued fresh stock options under the business’s current ESOP plan. The news comes at a time when the company’s stock is trading at one of its lowest levels since its initial public offering in November of last year.
One97 Communications disclosed in a stock exchange filing that it had issued 39,70,721 stock options to eligible workers under the One 97 Employees Stock Option Scheme 2019. The exercise price of these stock options has been set at Rs 9 per option by the corporation.
The number of employees who will benefit from this gift has not been disclosed by the corporation.
The policy also specifies how alternatives will be handled in the event of death, permanent incapacity, resignation, termination, retirement, or desertion, according to Paytm.
According to the company’s stock prices today, the value of these new ESOPs awarded by One97 Communications is estimated to be Rs 222.5 crore by our data tracking platform Fintrackr.
Paytm has also allotted 177,114 equity shares to employees who have exercised their options, according to a separate filing. In its disclosures, One97 did not identify the individuals who were issued stock options.
The huge ESOPs programme has been cited by some brokerages as a reason why profits will continue to be a drag in the near future. One reason for institutional shareholders’ opposition to Paytm’s proposal is because two-thirds of them voted against it. The ESOP resolution, on the other hand, was approved with over 93 percent of the votes cast in favour of the corporation.
In a recent letter to shareholders, founder Vijay Shekhar Sharma claimed that “Paytm should be running EBITDA breakeven in the next six quarters (ie EBITDA before ESOP cost, and by the quarter ending September 2023),” significantly ahead of most analysts’ expectations. We’ll accomplish this without jeopardising any of our expansion objectives.”
Following the exercise of ESOPs held by its 166 former and present workers in August last year, Paytm distributed equity shares to them before to going public. According to Paytm’s regulatory filings, the business has distributed 10,11,582 equity shares to workers who have applied to exercise their options under the ESOP Scheme 2008 and ESOP Scheme 2019.
Nykaa, a beauty-focused online marketplace, and Zomato, a food-delivery company, both met similar resistance after going public.
Deepinder Goyal, the founder and CEO of foodtech firm Zomato, revealed last week that he will give the whole earnings of his recently vested ESOP worth Rs 700 crore to the Zomato Future Foundation.