IPO-Bound Paytm To Expand ESOP Pool By 154% With 3.7 Cr Shares

IPO-bound digital payments startup Paytm on Monday (August 09) sent a notice to its shareholders for an extraordinary general meeting that will be held on Sep 2, 2021. Ahead of the much-awaited IPO, the company is seeking shareholder approval for the following to increase the existing ESOP pool from 24,094,280 equity options to 61,094,280 equity options at a face value of INR 1 each.  This will help the company reward and recognise employees who have contributed to the growth of the company.

The company is also seeking approval for the revised employment agreement of Vijay Shekhar Sharma as Managing Director and CEO. The EGM will also see the board approve the appointment of Neeraj Arora, former chief business officer of Whatsapp, Ashit Ranjit Lilani, managing partner of Saama Capital, as non-executive independent directors, and Douglas Feagin, senior vice president, Ant Group, as a director.  The remuneration of the directors will be as follows:

Mark Schwartz : $250,000 or INR 1.85 Cr

Pallavi Shardul Shroff: 250,000 or INR 1.85 Cr

Ashit Ranjit Lilani: $200,000 or INR 1.48 Cr

Neeraj Arora: $200,000 or INR 1.48 Cr

The company is also seeking approval for a donation of up to INR 1.62 Cr for the establishment of Air Quality Action Forum with United Nations Environment Programme (“UNEP”) through Paytm Foundation.

Paytm’s GMV, at INR 4,033 billion, is the highest in the payments industry as per RedSeer’s analysis, while Paytm Payment Gateway is the largest payment gateway aggregator in India based on total transactions.  Paytm Money, the company’s bet on wealth management services, has built a strong holding for itself with a combined AUM of INR 52 Bn in mutual funds, gold and stock broking, as per the company’s DRHP. The company’s lending business, merchant loans, as well as its Buy Now, Pay Later product Paytm Postpaid is growing well, with an extension of the same also being launched recently called Paytm Postpaid Mini. 

The company’s DRHP reveals that it has disbursed 1.4 Mn loans in Q4FY21, almost 53 times higher than the number of loans (26,000) disbursed during the same period the previous year. With all of these revenue-driven businesses and a focussed growth, Paytm has also turned contribution margin positive in FY21.

As per the company’s DRHP, in consumer to merchant transactions Paytm has a 40% market share, whereas in consumer to merchant wallet transactions, Paytm has a 65-70% market share.

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.