Ex-employees of Paytm convert ESOPs into shares worth INR 182 crore
According to recent regulatory filings with the Registrar of Companies, Paytm recently offered new employee stock ownership plans (Esops) to 166 former and present workers, which were then converted into company shares.
The news comes ahead of the Noida-based firm's scheduled initial public offering (IPO), which is set to take place in November.
Over a million Esops were issued in total, largely to senior staff members.
The Esops were given away at a cost of Rs 9 each.
These converted Esops are valued at about Rs 182 crore, based on Paytm's latest valuation of $16 billion (around Rs 1.2 lakh crore).
“Paytm shares were last valued at Rs 18,000 apiece. Now after the 1:10 stock split, it would be Rs 1,800 per share,” a person aware of the matter said.
This means that for each Esop awarded, the employee will receive ten shares upon conversion.
According to the records, Paytm's former president Amit Nayyar is among the employees who have used the conversion option.
On August 16, ET reported that roughly 300 Esop workers were attempting to convert their stock options into Esop shares ahead of the company's much-anticipated $2.2 billion IPO.
Employees must pay a tax when converting stock options to shares, which is based on the difference between the current share price and the price at which the Paytm shares were given.
The Paytm Esop conversion plan follows closely on the heels of food delivery firm Zomato's successful IPO in July, which created roughly 18 multimillionaires among its senior management.
Paytm told its shareholders earlier this month that it planned to more than double its Esop pool before its extraordinary general meeting (EGM) on September 2.
In new-age companies, Esops have long been utilised as a strategy to attract and retain talent.
Due to the historic amounts of money put into the startup ecosystem over the previous 12-18 months, demand for Esops has risen along with company values.
Employees at top-tier firms including PhonePe, Udaan, Razorpay, Cred, Acko, Zerodha, and Ola have been granted Esops.
The idea is that these shares can be sold at a better price during an IPO or a business share repurchase.
Last month, ET revealed that a slew of companies had combined share buybacks worth about $546 million in the previous year.
Paytm filed a draught red herring prospectus (DRHP) with India's capital markets regulator, the Securities and Exchange Board of India (Sebi), in July, to raise Rs 16,600 crore ($2.2 billion) through an initial public offering (IPO), which will be one of the country's largest in at least a decade.
According to Paytm, the stock offering will include a fresh issuance of Rs 8,300 crore ($1.1 billion) and a secondary issue or offer for sale (OFS) at the same amount.
A pre-IPO investment round of up to Rs 2,000 crore may also be considered by the corporation.
If this occurs, the size of the new issuance will be changed in accordance with the DRHP.
The news comes ahead of the Noida-based firm's scheduled initial public offering (IPO), which is set to take place in November.
Over a million Esops were issued in total, largely to senior staff members.
The Esops were given away at a cost of Rs 9 each.
These converted Esops are valued at about Rs 182 crore, based on Paytm's latest valuation of $16 billion (around Rs 1.2 lakh crore).
“Paytm shares were last valued at Rs 18,000 apiece. Now after the 1:10 stock split, it would be Rs 1,800 per share,” a person aware of the matter said.
This means that for each Esop awarded, the employee will receive ten shares upon conversion.
According to the records, Paytm's former president Amit Nayyar is among the employees who have used the conversion option.
On August 16, ET reported that roughly 300 Esop workers were attempting to convert their stock options into Esop shares ahead of the company's much-anticipated $2.2 billion IPO.
Employees must pay a tax when converting stock options to shares, which is based on the difference between the current share price and the price at which the Paytm shares were given.
The Paytm Esop conversion plan follows closely on the heels of food delivery firm Zomato's successful IPO in July, which created roughly 18 multimillionaires among its senior management.
Paytm told its shareholders earlier this month that it planned to more than double its Esop pool before its extraordinary general meeting (EGM) on September 2.
In new-age companies, Esops have long been utilised as a strategy to attract and retain talent.
Due to the historic amounts of money put into the startup ecosystem over the previous 12-18 months, demand for Esops has risen along with company values.
Employees at top-tier firms including PhonePe, Udaan, Razorpay, Cred, Acko, Zerodha, and Ola have been granted Esops.
The idea is that these shares can be sold at a better price during an IPO or a business share repurchase.
Last month, ET revealed that a slew of companies had combined share buybacks worth about $546 million in the previous year.
Paytm filed a draught red herring prospectus (DRHP) with India's capital markets regulator, the Securities and Exchange Board of India (Sebi), in July, to raise Rs 16,600 crore ($2.2 billion) through an initial public offering (IPO), which will be one of the country's largest in at least a decade.
According to Paytm, the stock offering will include a fresh issuance of Rs 8,300 crore ($1.1 billion) and a secondary issue or offer for sale (OFS) at the same amount.
A pre-IPO investment round of up to Rs 2,000 crore may also be considered by the corporation.
If this occurs, the size of the new issuance will be changed in accordance with the DRHP.
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