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Tag: Paytm ESOP

  • Vijay Shekhar Sharma Gives Up 2.1 Crore Paytm Shares Valued at INR 1,800 Crore

    On 16 April, Paytm revealed that Vijay Shekhar Sharma, the company’s founder and CEO, had renounced 21 million employee stock options worth over INR 1,800 crore. This action came months after the Securities and Exchange Board of India (SEBI) had sent him show-cause notices for breaking the rules governing the granting of share-based employee benefits. Vijay Shekhar Sharma, the company’s chairman, managing director, and chief executive officer, notified the company in a letter dated April 16, 2025, that he had voluntarily renounced all 2,10,00,000 ESOPs that had been granted to him under the One 97 Employees Stock Option Scheme, 2019, with immediate effect, according to a regulatory filing made by Paytm to the stock exchanges.

    How this will Change the Business Dynamics of Paytm?

    According to the filing, the company’s ESOP programme has refunded the remaining unvested ESOPs to the ESOP pool, while some have been terminated. The business added that this action will lead to a one-time, non-cash acceleration of INR 492 crore in ESOP expenses in Q4 FY 2025, as well as a corresponding reduction in ESOP expenses in subsequent years. In addition, Paytm stated that when it releases its Q4 Q4FY25 results, it will provide information about its ESOP cost timeline. A year prior to Paytm’s 2021 IPO, Sharma held a 14.7% stake in the fintech company. He transferred 30.97 million shares to Axis Trustee Services, which operated on behalf of Sharma’s family trust, in order to lower his ownership to 9.1% and qualify for ESOP incentives. Due to suspected factual misrepresentation, Sharma and other board members who served during Paytm’s November 2021 IPO received notices from SEBI.

    SEBI’s Move Forced Sharma to React

    In August 2024, Paytm received a show-cause notice from SEBI for Vijay Shekhar Sharma’s ESOP grant, which violated the regulations governing share-based employee perks. Large shareholders who have the power to affect business decisions are prohibited from owning ESOPs under SEBI’s market regulations. The corporation made improvements to its ESOP plan in March, including tying ESOP vesting to the most recent appraisal exercise’s annual performance ratings. Additionally, Paytm has distributed ESOPs to qualified workers at least twice in the last six months and increased the size of its ESOP pool in recent months.

    Since its listing in November 2021, One97 Communications, the parent company of Paytm, has never reported a positive EBITDA. Nonetheless, it has continuously emphasised EBITDA prior to ESOP expenditures as a crucial indicator. On May 30, 2025, the business is expected to release the results of the March quarter. An international news outlet reports that Paytm is anticipated to disclose an adjusted net loss of roughly INR 9 crore and an EBITDA of INR 64 crore on revenue of INR 2,051 crore. It recorded an EBITDA of INR 559 crore for FY24 (excluding ESOP charges).

  • 2.44 Lakh Equity Shares Are Allotted by Paytm Under ESOP Plans

    One97 Communications, the parent company of Paytm, has distributed 2.44 lakh equity shares to qualified workers through its different employee stock ownership programmes (ESOPs). During its meeting on December 5, 2024, the company’s nomination and remuneration committee approved the distribution of 244,801 equity shares with a face value of INR 1 each, fully paid up, to eligible employees upon exercise of vested options, according to a filing made by Paytm. Of these, 2,006 shares were distributed under ESOP 2008, while 242,795 shares were awarded under the ESOP 2019 programme. The company’s issued and paid-up equity share capital has increased from INR 63.71 Cr to INR 63.73 Cr (or INR 63,73,82,630 to be exact) as a result of this allocation. The newly allotted shares are worth INR 23.41 Cr based on the stock’s most recent closing price on 5 December 2024.

    Giving ESOPs in Massive Capacities

    Paytm has been giving out ESOPs in large quantities at the moment. The fintech giant gave its staff members 4 lakh stock options in November. Before that, in October, it granted 4.81 lakh stock options, increasing the size of its ESOP pool. Shares of Paytm have been rising recently. Several broking firms praised the company for reducing losses and increasing income, and a few days ago, the stock reached a new 52-week high of INR 951.90 per share.

    Bernstein also boosted its price objective for Paytm from INR 750 per share to INR 1,000, while UBS lifted its price goal from INR 490 per share to INR 1,000. Paytm has unveiled UPI Lite, a new Unified Payments Interface (UPI) product that enables users to set up pin-free automated top-ups for daily payments under INR 500.

    Current Financial Dynamics of Paytm

    In contrast to the INR 292 Cr loss reported in the same period last year, Paytm declared a consolidated profit after tax (PAT) of INR 930 Cr in the September quarter (Q2) of the fiscal year ending March 2025 (FY25). However, a one-time exceptional gain of INR 1,345 Cr from the sale of its entertainment ticketing business was the reason for the profit. From INR 2,519 Cr in Q2 FY24 to INR 1,660 Cr during the quarter, revenue from operations fell 34% year over year (YoY). On December 5, Paytm’s stock ended the day 1.8% higher on the BSE at INR 956.5.

    ESOP’s Popularity is Rising in India’s Startup Sector

    As part of their initiatives to reward staff, several modern internet businesses have issued ESOPs this year, including Delhivery, Nykaa, ixigo, and ideaForge, among others. The travel tech business ixigo gave 17.57 lakh stock options last month, while logistics giant Delhivery increased its ESOP pool by allocating 73K stock options. Only a few days after raising INR 8,500 Cr through the placement of eligible institutions—its first significant fundraising effort since its 2021 IPO—Zomato announced its ESOP.

    Paytm UPI Expands to UAE, France, and Singapore
    Paytm UPI is now operational in UAE, France, and Singapore, allowing users to make seamless payments while traveling internationally.
    StartupTalkyNitin Konde