Welcome to the latest edition of Fables of ESOP for August 2024. This month has seen significant activity in the ESOP landscape, with major companies like Propelld, Reliance Retail, and Tata Digital making notable moves to expand their ESOP pools and incentivize their top talent. Notably, Paytm faced scrutiny from SEBI over its ESOP allocations to its CEO, while Tracxn and Jupiter also made headlines with their substantial ESOP expansions.
On the regulatory front, there's an important update on the tax treatment of one-time voluntary payments related to ESOPs.
Dive into the details of these developments shaping the world of employee stock options.
Propelld completed a ₹7.05 crore ESOP buyback, with 18 employees participating. The ESOP pool was expanded by 50%, growing from 2,898 to 4,334 shares to attract and retain top talent. Additionally, Propelld granted ₹6.5 crore worth of ESOPs to 70 employees, highlighting its commitment to rewarding high performance.
Reliance Retail has granted ₹351 crore worth of ESOPs to its leadership team, marking a significant move to retain and incentivize key executives. This allocation reflects the company’s commitment to rewarding its top-tier management.
Tata Digital has introduced ESOPs for its senior executives to drive performance and align their goals with the company’s growth objectives. This move is part of Tata Digital's broader strategy to motivate leadership and ensure long-term commitment as the company continues to expand its digital ventures.
SEBI issued a show cause notice to Paytm regarding the 2.1 crore ESOPs granted to CEO Vijay Shekhar Sharma in FY 2022. In response, Paytm clarified that all required disclosures had been made, addressing SEBI’s concerns as part of its annual financial filing for FY 2024.
Tracxn Technologies expanded its ESOP pool by allotting 99,707 equity shares to eligible employees at an exercise price of ₹1 per share. The newly allotted ESOPs, valued at ₹91.2 lakh, increased the company's paid-up share capital to ₹10.45 crore. This move is part of the TRACXN Employee Stock Option Plan 2016.
Paytm expanded its ESOP plan by allotting 1,10,357 equity shares to eligible employees at an exercise price of ₹9 per share. This is the fourth ESOP offering this year, increasing Paytm's paid-up equity shares to 63.64 crore. Previous allotments include 6,000 shares in July, 2,81,394 shares in June, and 87,373 shares in May.
Neobanking platform Jupiter has expanded its ESOP pool by ₹40.7 crore, issuing 21,665 options priced at ₹18,826.29 per share. This expansion follows a $4 million ESOP buyback in March 2022 and now represents 7.89% of the company’s total share capital. Jupiter, valued at $710 million during its Series C round in December 2021, reported ₹56 crore in revenue and a ₹327 crore loss for FY23. The company is expanding its product portfolio, including securing a wallet license from RBI.
Tech Mahindra has allotted 59,082 equity shares under its ESOP, approved by the Securities Allotment Committee on August 14, 2024. This follows a previous allotment of 44,605 shares in July. With a current stock price of ₹1,585 and a market cap of ₹1.49 trillion, these initiatives are part of Tech Mahindra's strategy to reward and retain employees by offering them a stake in the company's growth.
Intimation of allotment of 13720 equity shares pursuant to exercise of options under Indigo Paints- Employee Stock Option Scheme 2019.
Aditya Birla Fashion and Retail (ABFRL) has allotted 3,200 equity shares, each with a face value of ₹10, under the Employee Stock Option Scheme 2017. This allotment will increase the company's paid-up equity capital, reflecting a positive trend in its stock price. The additional funds raised are intended to support various business functions and operational expansion.
SBI Cards & Payment Services allowed a total of 95,240 new equity shares under its ESOP Plan. Following allotment, the company's total equity shares grew to 95,10,81,034 e valued at Rs. 10 each.
Before this, SBI Card allotted 28 500 Equity Shares under its Employee Stock Option Plan 2019 (ESOP Scheme 2019).
PB Fintech, the parent company of Policybazaar and Paisabazaar, is set to expand its ESOP Pool significantly with the launch of a new program called the PB Fintech Limited Employees Stock Option program 2024.
According to reports, the new ESOP scheme is worth about Rs 1,931 crore. This will grant 1,14,00,000 employee stock options, which is 2.5% of the company's issued and paid-up share capital as of August 14, 2024.
Borosil Scientific has allotted 49,089 equity shares under ESOP. Pursuant to the aforesaid allotment of equity shares, the issued and paid-up equity share capital of the Company stands increased to Rs. 8,88,45,481 with equity shares priced at face value of Re. 1/- each.
Axis Bank has allotted 1,23,160 equity shares of Rs. 2/- each under its ESOP / RSU Scheme on August 22.
Before this, Axis Bank has allotted 2,17,345 equity shares of Rs. 2/-each.
Following both the grants, the paid-up share capital of the Bank has accordingly increased to Rs. 6,18,38,77,848 with equity shares of Rs. 2/- each.
Yes Bank has allotted 46,48,901 equity shares under ESOP. Consequent to the allotment, the paid-up share capital of the Bank stands increased to Rs. 62,68,80,59,962/- consisting of equity shares valued at. 2/- each.
Before this, Yes Bank had allotted 31,38,137 equity shares valued at Rs. 2 each under its ESOP Plan on 15 June 2024
The Board of Waaree Renewables Technologies has approved the allotment of 22,275 equity shares under ESOP. With this allotment, the paid up equity share capital has increased to 20,83,43,080 divided into 10,41,71,540 fully paid-up Equity Shares of face value of Rs. 2/- each.
Waaree Renewables Technologies Ltd, established in 1999, is a prominent solar EPC (Engineering, Procurement, and Construction) company in India. It specializes in providing turnkey solutions for various solar projects, including ground-mounted, rooftop, and floating solar installations.
Bandhan Bank has allotted 756 new equity shares under ESOP. Post allotment, the issued and paid-up equity share capital of the Bank stands increased Rs. 16,10,97,09,250/- comprising shares of Rs.10/- each.
Before this, Bandhan Bank allotted 249 shares at the value of Rs. 10 each in April.
Ideaforge Technology has allotted 38,946 equity shares under ESOP. Post allotment, the paid-up capital of the Company stands increased to Rs. 43,02,49,000/- comprising of equity shares of Rs. 10/- each.
Before this Ideaforge expanded its ESOP Pool by issuing 95,954 stock options at Rs. 10 each in July.
The parent firm of FirstCry, Brainbees Solutions, has been served with show-cause notices about nearly Rs 80 crore in ESOP (employee stock ownership plan) expenses between AY 2018-19 and AY 2021-22. The Income Tax Department sent out the notices in accordance with clause (b) of Section 148A of the Income Tax Act.
While the company has said that expenses by the company in its tax returns for above mentioned assessment years is in accordance with the provisions of the Income Tax Act, 1961 and that they will file an appropriate response in this matter, future activities in this case are still awaited.
August has been a busy month for ESOP news. With Propelld, Reliance Retail, and Tata Digital making big moves to expand their ESOP pools, it’s clear that companies are focusing on keeping their teams motivated and invested. Paytm’s run-in with SEBI adds a regulatory twist to the month’s updates, while Tracxn and Jupiter also made headlines with their own significant ESOP changes. As we wrap up the month, it’s a great time to reflect on how these developments impact the future of employee ownership and compensation.
.svg)
.svg)
.svg)