Paytm Has Offered 47,63,398 E Stock Options to its Employees 

Paytm, a leading digital payments and financial services company, has announced the issuance of 47,63,398 stock options to its eligible employees under the One 97 Employees Stock Option Scheme 2019 (ESOP 2019). This decision was approved by the Nomination and Remuneration Committee of Paytm's Board of Directors during their meeting on June 17, 2024.

These stock options, priced at ₹9 each, will be effective from July 1, 2024. The scheme allows employees to convert these options into fully paid-up equity shares, with each option representing one equity share of face value ₹1.

Additionally, Paytm disclosed that 17,59,852 stock options have been cancelled as per the terms of ESOP 2019. The scheme aligns with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, providing flexibility for employees to exercise options throughout their period of active employment.

The company emphasized that adjustments will be made in case of any corporate actions affecting the stock options, ensuring fairness and compliance with ESOP 2019 guidelines.

Read the full BSE Announcement here

ESOP 2019

The ESOP Scheme 2019, governed by Rule 12 of the Companies Share Capital and Debentures Rules, 2014 amendments, outlines significant provisions aimed at employee stock options within companies. Here are the essential aspects:

Key Features and Guidelines 

• Total ESOP Pool: The scheme allows for a total of 2,166,524 stock options to be granted, subject to specific terms and conditions defined in ESOP Scheme 2019.
• Eligibility: Classes of employees eligible to participate in the scheme are determined by the Nomination and Remuneration Committee.
• Vesting and Period: Options under ESOP Scheme 2019 begin vesting from the end of the first year after grant and continue up to the end of the fifth year, following a predefined vesting schedule.
• Exercise Price: Determined as per the provisions laid out in ESOP Scheme 2019.
• Exercise Period: Employees can exercise their options within a period not exceeding five years from the date of vesting, as per the scheme's guidelines.
• Lock-in Period: Shares obtained upon exercising vested options are not subject to any lock-in period post-exercise but are subject to transfer restrictions outlined in the company's share transfer policy.
• Maximum Options: No employee can be granted options exceeding 1% of the outstanding issued share capital in any given year, excluding outstanding options and conversions.
• Valuation: The Black-Scholes options pricing model is used by the company to estimate the value of ESOPs.
• Lapse Conditions: Conditions under which vested options may lapse, such as termination of employment due to misconduct, are in accordance with ESOP Scheme 2019.
• Exercise Period Upon Termination: In case of termination or resignation, employees must exercise their vested options immediately, as specified in ESOP Scheme 2019.

*Note: The number of options granted to Key Managerial Personnel is specified, with no employees receiving options equivalent to 5% or more of the options granted during the year.

This framework aims to incentivize employees by offering them ownership in the company, aligning their interests with long-term corporate goals and performance.

Paytm

Paytm is a leading digital payments and financial services company based in India. It offers a wide range of payment solutions for both consumers and merchants through its mobile app, including mobile recharges, utility bill payments, and money transfers.

Merchants can accept digital payments using QR codes or Point of Sale (POS) devices, which support various payment instruments like UPI and Paytm Wallet. Paytm also provides financial services such as lending, insurance, and wealth management, leveraging insights from its vast user base to tailor products that meet customer needs.

Additionally, Paytm's commerce and cloud services support businesses by offering transaction and subscription-based services, including ticketing and marketing solutions.