Paytm Provides 4.81 Lakh Stock Options to Employees

Fintech giant Paytm has recently approved the grant of 4.81 lakh stock options to eligible employees under its Employee Stock Option Scheme 2019 (ESOP 2019). This strategic move is part of the company’s ongoing efforts to enhance employee engagement and retention amid a challenging business environment.

According to an exchange filing, the newly allotted stock options are convertible into an equivalent number of equity shares, each carrying a face value of INR 1. The exercise price for each option is set at INR 9, making this a favorable opportunity for employees to benefit from the company’s growth. Based on Paytm’s last closing price of INR 724.95, these newly allotted ESOPs are valued at approximately INR 34.8 crore.

In addition to the new grants, Paytm announced the cancellation or lapsing of 26.96 lakh stock options under the scheme. This cancellation is attributed to various factors, including employee resignations and other corporate actions. This adjustment reflects the dynamic nature of the workforce and the company’s ongoing commitment to managing its stock option pool effectively.

This announcement follows a previous grant in September 2024, where Paytm allotted 2.54 lakh equity shares under its ESOP schemes. Specifically, 2,54,288 shares were allocated under ESOP 2019, with an additional 620 shares under ESOP 2008. These grants highlight Paytm’s focus on rewarding its employees and retaining talent in a competitive industry.

Despite facing significant challenges, including a crackdown from the Reserve Bank of India on Paytm Payments Bank earlier this year, the company remains focused on its core financial services business. In the first quarter (Q1) of the financial year 2024-25 (FY25), Paytm reported a net loss of INR 840.1 crore, more than doubling from previous losses, while revenue from operations declined 36% year-on-year to INR 1,502 crore.

In response to these headwinds, Paytm has taken strategic steps, including the recent sale of its entertainment and ticketing business to Zomato for INR 2,048 crore. This move allows the company to concentrate on its payments and financial services distribution business, which remains its core focus.

Additionally, Paytm has secured government approval for its investment in its payments arm, Paytm Payment Services Ltd., paving the way for the company to reapply for a payment aggregator license. This is a significant step forward for Paytm, providing it with the regulatory backing needed to strengthen its market position.

Moreover, the company continues to embrace innovation, particularly in artificial intelligence (AI). Earlier this month, Paytm appointed its former payments CTO, Manmeet Dhody, as an “AI Fellow” to spearhead projects related to AI innovation in the business. This move indicates Paytm’s commitment to leveraging technology for enhanced service delivery and operational efficiency.

In summary, Paytm’s provision of 4.81 lakh stock options to employees is a strategic initiative aimed at fostering engagement and loyalty among its workforce. Despite facing challenges, the company is poised to navigate the landscape by focusing on its core services and embracing innovation.