Fintech giant Paytm has announced an expansion of its Employee Stock Option Plan (ESOP) pool by allocating 2,81,394 shares to its employees.
Out of these, 2,78,858 equity shares have been allotted under the Employee Stock Option Scheme 2019, and 2,536 shares under the Employee Stock Option Scheme 2008.
In an exchange filing, Paytm stated, “We wish to inform that the Nomination and Remuneration Committee of the Board of the Company (‘Committee’), on July 7, 2024, at 12:35 a.m., through circulation, approved the allotment of 2,81,394 equity shares with a face value of ₹1 each as fully paid-up to eligible employees upon exercise of vested options.”
Based on the stock’s last opening price on BSE on Monday, these new stock options are valued at over INR 12.2 Crore.
This latest issuance follows the allocation of 87,373 stock options under its ESOP 2019 plan in May. Earlier in 2023, Paytm had earmarked an additional 17 lakh stock options for its employees.
With this ESOP allocation, the company’s issued, subscribed, and paid-up equity share capital has increased to INR 63,62,74,090 from INR 63,59,92,696.
Paytm’s shares were trading up 8.21%, at INR 472.45 at 02:50 PM on the BSE.
Despite these developments, Paytm faces internal challenges, including reports of plans to reduce its workforce by 15-20% this fiscal year as part of a restructuring measure.
Several employees have approached the Ministry of Labour and Employment, alleging “unlawful termination” without due compensation.
Additionally, Paytm has been dealing with regulatory setbacks, such as the Reserve Bank of India’s directive to halt operations of Paytm Payments Bank starting March 2024.
The ESOP allocation comes at a time when many new-age tech startups, including Paytm, have been actively allotting ESOPs.
Recently, Tracxn allotted 3.6 lakh shares under ESOP, Delhivery Allocates 11.06 Lakh Shares, while PB Fintech allocated over 48 lakh ESOPs in June.
Startups like Delhivery and DeHaat have also announced ESOP buyback programs to provide liquidity to employees.
On the business front, Paytm is undergoing several strategic shifts, with reports of potential talks with Zomato to sell its movies and event ticketing business.
Additionally, Goldman Sachs and Marshall Wace sold Paytm shares worth INR 208.35 Crore via bulk and block deals last month.
In June, Paytm approached the IRDAI to withdraw a general insurance license for its affiliate, Paytm General Insurance Ltd.
Paytm’s financial health has also been under scrutiny, with its net loss tripling year-on-year to INR 550.5 Crore in the March quarter (Q4) of FY2023-24, compared to INR 167.5 Crore in the same period last year.
Revenue from operations decreased by 2.9% YoY to INR 2,267.10 Crore, down from INR 2,334 Crore the previous year.
