On March 11, 2025, One97 Communications Limited, the parent company of Paytm, announced that its board approved the grant of 109,995 Employee Stock Options (ESOPs) to eligible employees. Each option allows for conversion into a fully paid equity share with a face value of ₹1, priced at an exercise price of ₹9 per option.
Following this announcement, at 11:30 AM on March 11, 2025, One97 Communications' share price rose by 4.94%, reaching ₹698.1 per share.
ESOP grant details
The newly granted ESOPs can be exercised at any time during continuous active employment from the date of vesting. In the event of corporate actions such as rights issues, bonus issues, stock splits, mergers, or reorganisations, necessary adjustments to the number of stock options will be made according to the ESOP 2019 plan.
Financial performance
For the December quarter of this fiscal year, Paytm reported a consolidated net loss of ₹208.3 crores, a slight improvement from the ₹219.8 crores loss in the same period the previous year. Revenue from operations declined by 35.8% to ₹1,827.8 crores compared to ₹2,850.5 crores in the corresponding period last fiscal.
Revenue from payment services stood at ₹1,059 crores, up 8% quarter-on-quarter, while financial services revenue climbed 34% quarter-on-quarter to ₹502 crores.
Implications for share market investment
The approval of the ESOP grant and the subsequent rise in Paytm's share price are significant for those involved in share market investment. ESOPs are often used by companies to attract and retain talent, aligning employees' interests with shareholders by providing them with ownership stakes. This results in increased employee motivation and potentially improved company performance, factors that investors may consider when evaluating a company's prospects.
However, it's important to note that while ESOPs can have positive effects, they also result in equity dilution, which can impact existing shareholders' ownership percentages. Investors should keep these factors in mind when making investment decisions.
At 12:30 PM on March 11, 2025, shares of One97 Communications were trading at ₹690.60 per share.
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