Paytm employees convert ESOPs into shares worth Rs 182 crore

Paytm, the digital payment giant recently granted 166 former and current employees, which were then converted into company shares.

The development comes ahead of the Noida-based firm’s planned initial public offering (IPO), which is set to take place in November.

The Esops were given away at a cost of Rs 9 each. These converted Esops are worth over Rs 182 crore, based on Paytm’s latest valuation of $16 billion (roughly Rs 1.2 lakh crore).

IPO-bound Paytm has one of the widest ESOP pools in the startup ecosystem and has given ESOPs to employees who have made a significant contribution to the company’s growth as rewards and benefits.

Paytm has a total paid-up capital of Rs 60,69,41,722, with as many as 909 employees who have vested ESOPs with an approximate 14 million options vested.

The payment firm changed some aspects of its ESOP policy last year, introducing performance-based ESOPs. Recently, employees with ESOPs will be able to convert them into shares and add them to their demat account, according to a letter from Paytm to its shareholders.

Given the cost of converting ESOPs to shares, as well as the tax implications, Paytm will assist employees in obtaining loans from its established lending partners, making it easier for them to bear the cost of becoming shareholders.

Through its lending partners, Paytm will be able to provide loans of up to Rs 100 crore.

Paytm will also cover the interest on these loans for six months, allowing employees to better manage their finances while also becoming proud shareholders of the company.

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 issue worth Rs 8,300 crore ($1.1 billion) and a secondary issue or offer for sale (OFS) worth the same amount. A pre-IPO funding round of up to Rs 2,000 cr

According to the company’s DRHP, it disbursed 1.4 million loans in Q4FY21, nearly 53 times the number of loans disbursed in the same period the previous year (26,000). Paytm has also turned contribution margin positive in FY21, because of all those revenue-driven businesses and focused growth.

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