Paytm, a leader in the fintech sector, has announced the expansion of its Employee Stock Option Plan (ESOP) by allotting 1,10,357 equity shares to its eligible employees.
This marks the fourth ESOP offering by the company this year.
In a recent filing to the exchange, Paytm stated, “We wish to inform that the Nomination and Remuneration Committee of the Board of the Company (“Committee”), on August 5, 2024 at 11:59 p.m. (IST) through circulation, approved the allotment of 1,10,357 equity shares having face value of ₹ 1 each, as fully paid-up, to the eligible employees, upon exercise of vested options under Employee Stock Option Scheme 2019.”
Following this allotment, Paytm’s issued, subscribed, and paid-up equity shares have increased to 63,63,84,447 from the previous 63,62,74,090 shares.
The exercise price per share for this allotment has been set at INR 9, which includes a premium of INR 8 per share.
Financial Implications
Based on Paytm’s closing price of INR 487.25 on BSE on Tuesday, the new stock options amount to over INR 5.37 crore.
This move is part of a series of ESOP allocations made by the company in recent months.
Last month, Paytm allocated 6,000 shares under the same ESOP scheme, and in July, it granted an additional 2,81,394 shares under ESOP scheme.
In May, 87,373 stock options were granted under the ESOP plan.
Strategic Importance
Recently, Paytm has been facing multiple challenges, with reports about the company potentially reducing its workforce by 15-20% this fiscal year.
Additionally, several employees have approached the Ministry of Labour and Employment, alleging unlawful termination without due compensation.
The ESOP expansion is a strategic initiative to mitigate the negative impacts of these incidents, helping to retain talent, enhance productivity, and attract new hires.
The trend of allotting ESOPs has been observed among new-age tech startups, including fintech firms like Paytm.
Companies such as Tracxn, Mamaearth, Delhivery and Zomato have also offered ESOPs recently.
Financial Performance
On the financial front, Paytm reported a consolidated net loss of INR 840 crore in the first quarter of the financial year 2024-25, a 134% increase year-on-year from INR 358 crore.
Revenue from operations also saw a significant drop, decreasing by 36% to INR 1,502 crore from INR 2,342 crore in the corresponding quarter of the previous year.
Paytm’s recent ESOP allotment highlights its strategic efforts to retain and incentivize its workforce amidst a challenging business environment.
Despite facing regulatory and operational hurdles, the company remains committed to its employees and its future growth.
