Paytm, a leading player in India’s fintech landscape, has announced the allocation of 148,313 equity shares to eligible employees through its Employee Stock Option Plan (ESOP) schemes, demonstrating its commitment to employee retention and value creation despite recent regulatory challenges.
The company disclosed in an exchange filing that the majority of shares (148,243) were allotted under the ESOP 2019 scheme, while 70 shares were distributed through the ESOP 2008 scheme. This fresh issuance has increased Paytm’s total paid-up capital from INR 63.73 crore to INR 63.75 crore.
At an exercise price of INR 9 per share and based on Tuesday’s closing price, the newly allocated shares are valued at approximately INR 14.57 crore. This allocation follows several significant ESOP-related developments at Paytm, including a December 2024 allocation of 2.44 lakh equity shares and the reservation of an additional 4 lakh stock options in November.
“This latest ESOP allocation reflects our continued focus on employee wealth creation and retention of top talent,” states a senior Paytm executive who requested anonymity. “Despite market challenges, we believe in rewarding our employees who have been instrumental in our growth journey.”
The ESOP allocation comes during a period of significant transformation for Paytm. The company has faced various challenges, including restrictions imposed by the Reserve Bank of India (RBI) on Paytm Payments Bank Limited in January 2024 due to compliance concerns. However, the company has shown resilience by securing National Payments Corporation of India’s (NPCI) approval to onboard new UPI users in October 2024.
Siddharth Mehta, a fintech analyst at Chennai-based TechView Research, notes, “Paytm’s strategic moves, including workforce optimization and the sale of its entertainment ticketing business to Zomato for INR 2,048 crore, demonstrate its focus on core digital payment services. The continued ESOP allocations signal confidence in the company’s long-term prospects.”
The company has also launched innovative services such as UPI Lite automatic top-up for sub-INR 500 transactions and “UPI International” in select overseas markets, although its UPI market share decreased to 7.03% in 2024 from 14.1% in the previous year.
For Tamil Nadu’s startup ecosystem, Paytm’s ESOP allocation holds significance as it sets benchmarks for employee compensation and retention strategies. Several Chennai-based fintech startups have been closely monitoring Paytm’s approach to employee stock options as they design their own ESOP policies.
The development also coincides with the resignation of Paytm’s head of compliance, Srinivas Yanamandra, who departed to pursue academic research opportunities, highlighting the ongoing changes within the organization’s leadership structure.
This latest ESOP allocation underscores Paytm’s commitment to employee welfare while navigating regulatory challenges and market dynamics. As the company continues to evolve its business model and expand its service offerings, its approach to employee compensation could influence similar practices across India’s fintech sector.
