paytm ipo: Exclusive: Vijay Shekhar Sharma gets new stock options ahead of Paytm IPO

paytm ipo: Exclusive: Vijay Shekhar Sharma gets new stock options ahead of Paytm IPO


Bengaluru | Mumbai: Paytm founder Vijay Shekhar Sharma is getting a significant amount of new stock options in One97 Communications, a move that would increase his stake in the parent company by 2-3%, people close to the matter said.

This comes ahead of the
$2.2-billion Paytm IPO, billed as the biggest in India in at least a decade.

The digital payments firm
recently more than doubled its ESOP pool to around 61,094,280 equity options at a face value of Re 1 each from around 24,094,280 equity options. Sources said a “significant chunk” of these new stock options have been allotted to Sharma. “They sought the shareholder approval for ESOP pool expansion in August, which was approved earlier this month. Almost half of it has been allocated to Sharma,” a source said.

Sharma, who holds around 15% stake in One97 Communications, is planning to sell a part of his holding through an offer for sale (OFS) in the upcoming Paytm IPO.

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The new stock options given to him will increase his holding even after he offloads a part of his shareholding. These are performance-linked and based on Paytm achieving certain milestones, sources said.

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Besides Sharma. Investors like Ant Group, Alibaba Group, SoftBank and Elevation Capital are also expected to sell parts of their stakes in the Paytm IPO.

When contacted, a Paytm spokesperson did not immediately respond to a query sent by ET.

“This is also a way of the management rewarding Sharma for scaling Paytm to this point (IPO) as a leading payments firm,” another person close to the company said.

Pre-IPO moves

To be sure, the allocation of new stock options to Sharma is not an anomaly as many top-tier founders have received such grants before their companies’ IPOs, so that they can reap the benefits of listing. On September 10, ET reported that founders of Tata-owned BigBasket
were also granted new management stock options to “retain, attract and motivate” talent at the online grocer.

Over the past few months, Paytm has seen its current and former executives
also converting their stock options to shares, hoping to cash in during the IPO. In August, the company also granted new ESOPs to 166 former and current employees, which were then converted into shares of the company, regulatory filings accessed by ET showed.

Additionally, Paytm has formalised three appointments to the board of directors: Neeraj Arora, former chief business officer of WhatsApp, and Ashit Ranjit Lilani, managing partner of Saama Capital, as non-executive independent directors; and Ant Group’s senior vice president Douglas Feagin as a director.

Paytm had in July
filed a draft red herring prospectus with the markets regulator, the Securities and Exchange Board of India (Sebi), to raise Rs 16,600 crore ($2.2 billion) through a public issue.

The offering will comprise a fresh issue worth Rs 8,300 crore and a secondary issue or an offer for sale of the same size, according to the draft papers. The company has kept an open window for a pre-IPO funding round of up to Rs 2,000 crore. If that happens, the size of the fresh issue will be adjusted accordingly.



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