We are discussing Fintech Startup Paytm Expanded its ESOP Pool by Allocating 2.8 Lakh Equity Shares to its Employees:
Paytm, a digital payment platform offering fintech startup, expanded its Employee Stock Option Plan by offering its employees more than 2.81 lakh shares. These newly allocated shares are worth around Rs 12.2 crore. The company offers a financial platform for secure, seamless, and easy transactions. The startup offers financial services and payment options to help merchants scale their businesses.
The company mentioned in a stock exchange filing that the nomination and remuneration committee allowed the allocation of 2,81,394 equity shares for Rs 1 each under the company’s employee stock option scheme. The allocated shares comprise Employee Stock Option Scheme 2019 and Employee Stock Options Scheme 2008, with 2,78,858 equity and 2,536 shares, respectively. The ESOPs are provided to employees with company stock to encash it after a specific duration at a predetermined value. The main aim of this scheme is to find new talent, gain new employees, and enhance productivity.
Inc42 mentioned that Paytm’s ESOP 2019 scheme allowed the allotment of 87,373 stock options in May. Earlier in 2023, the firm announced an additional 1.7 million stock options for its employees. Nykka also expanded its ESOP after mass suspension to rebuild its employee brand. Paytm’s stock increased by 9 percent, and the firm expects a valuation of $100 billion. The startup reported a decline in its workforce by 15-20% this year to reduce its losses. After the ESOP allocation, the company’s paid-up, issued, and subscribed equity share capital increased to Rs 636,274,090.
The fintech startup reported a three-time increase in net loss in y-o-y to Rs 550.5 crore for the fourth quarter of FY24. The operational revenue had a 2.9 percent y-o-y decrease to Rs 2,267.10 crore in the same duration. The company has been dealing with regulatory setbacks and other internal challenges. The stock options under the ESOP scheme offered by the startup have a price set at Rs 1 per share. The board approved granting these stock options to those under the Paytm employee stock option scheme. Many startups, including Nykaa, Delhivery, and Purple, announced their ESOP buyback programs to offer liquidity to employees.
Conclusion
Paytm announced the expansion of its employee stock option Plan by allocating 2,81,394 equity shares to its employees. These newly allocated shares are worth around Rs 12.2 crore. The ESOPs help a firm to gain new employees and enhance its productivity. By providing ESOP to employees with company stock, one can encash it after a specific duration at a predetermined value.
This fintech startup offers a digital payment platform to provide users with a secure, seamless, and easy transaction. Paytm’s announced a 9 percent increase in its stock with a predicted valuation of 100 billion USD. Paytm’s ESOP 2019 scheme allowed the allotment of 2,78,858 equity shares to employees, followed by 2,536 shares under the stock unit plan 2008. The firm had a 2.9% decline in operational revenue for this fiscal year.
