Paytm’s Parent Grants INR 220.7 Cr Worth ESOPs Amid Stock Price Fall

Paytm’s parent company, One97 Communications has granted new employee stock ownership plans (ESOPs) of INR  220.7 Cr to its employees. 

As per the regulatory filings, Paytm has granted 39,70,721 stock options under its ‘One 97 Employees Stock Option Scheme 2019’ (ESOP 2019 scheme) to eligible employees. The exercise price of these stock options is INR 9 apiece. 

The ESOP value is calculated based on Paytm’s stock closing at INR 566 today. However, if we calculate the ESOP value as per May 2,2022 stock price, when this information was officially communicated to BSE, the value of Paytm’s ESOP would be INR 238.71 Cr. 

In the filing, the startup also informed that a total of 1,77,114 equity shares have been vested by the employees. Of this, 77,278 equity shares were exercised under ESOP 2019 scheme while the remaining 99,836 equity shares were exercised under the Employee Stock Option Plan 2008. 

Further, the fintech giant’s paid-up equity share capital has increased from INR 64,85,67,292 Cr to  INR 64,87,44,406 Cr, consisting of equity shares of the face value of INR 1 apiece.

The latest development comes at a time when Paytm’s stocks are witnessing a massive price fall on the bourses. As per the BSE, its stocks are today trading at INR 557.10, down by 1.94%. It was previously closed at INR 568.15.  

According to an Inc42 report, Paytm’s gross merchandise value (GMV) soared 105% year-on-year (YoY) to INR 1,65,333 Cr in the initial two months of Q4 of FY 2021-2022, according to its regulatory filing. 

Moreover, its lending business scaled to 4.1 Mn loan disbursals during the first two months of the quarter (y-o-y growth of 449%), with about 2.2 Mn loans disbursed in February 2022 alone. This aggregates to a total loan value of INR 2,095 Cr (y-o-y growth of 366%), Paytm claimed in a regulatory filing.  

In September last year, it increased its employee stock option plan (ESOP) pool from a little over 24 Mn to 61 Mn — nearly 2.5x. Previously, 166 former and current employees had been allotted over 1 Mn shares at INR 9 each in exchange for their ESOPs including Amit Nayyar, who used to be Paytm’s president before his exit in June, as well as Rohit Thakur and Amit Veer who exited the company before the IPO. 

Prior to the IPO listing in November last year (2021), 220 employees of Paytm exercised their ESOPs. 

ESOPs Takes Centre Stage In Indian Startup Ecosystem

A good number of startups have raised funds through ESOP buyback programmes in the first five months of 2022. According to an inc42 report, Indian startup employees have made over $83 Mn through ESOP buybacks in the first quarter of 2022. 

Besides this, newly-minted fintech unicorn Oxyzo will be bringing a new ESOP pool worth close to INR 380 Cr for its employees. The fintech unicorn which entered the coveted club last month after raising the country’s biggest Series A round of $200 Mn is creating an ESOP pool for its employees in and outside India.

In an extraordinary general meeting held last month, the shareholders of the startup passed a resolution for the approval of Employee Stock Option Plan 2022 where the startup intends to offer not more than 4,586,348 equity shares to permanent employees over the course of two years. 

In April this year, edtech startup Unacademy expanded its ESOP pool size by 2,401X. The edtech startup, which was recently in the news for layoffs, has increased its ESOP pool size to 238 Mn options from 99K options earlier. 

In an extraordinary general meeting held on April 14, 2022, Unacademy’s board passed a resolution to amend the ESOP policy of the startup. All the employees of the startup will benefit from the increase in ESOP pool.

---

Update | 9th May, 5:30 PM IST

The article has been updated to include ESOP value. Previous details were miscalculated.