Paytm expands ESOP pool amid talent retention efforts

Fintech giant Paytm, owned by One97 Communications, has expanded its employee stock option plan (ESOP) pool by allocating 281,394 equity shares to its staff. This move is aimed at retaining talent within the company.

In a stock exchange filing on July 7, Paytm announced the approval of 281,394 equity shares with a face value of Rs 1 each. These shares will be fully paid-up and allotted to eligible employees under the Employee Stock Option Scheme 2019 and the Employee Stock Option Scheme 2008.

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With this development, Paytm’s issued, subscribed, and paid-up equity share capital will be Rs 636,274,090, consisting of 636,274,090 equity shares of Rs 1 each.

An Employee Stock Option Scheme (ESOS) allows companies to grant employees the right to purchase shares at a predetermined price, which is usually below market value. This benefits employees by giving them a stake in the company, which can increase their commitment to the firm’s success.

Paytm’s decision comes amid reports that the company, facing regulatory challenges, may lay off more employees in the current financial year. According to a report by The Financial Express in May, Paytm might reduce its workforce by 15-20 percent as it struggles with ongoing losses.

The digital payments firm reported a consolidated loss of Rs 549.6 crore in the fourth quarter of 2023-24, a significant increase from the previous quarter. The company attributed these losses to temporary disruptions in business operations. In January, the Reserve Bank of India imposed restrictions on Paytm Payments Banks, affecting its financial and operational services.