Once the stock price rises above the IPO price, Paytm CEO Vijay Shekhar Sharma will be able to claim ESOPs.

  • April 6, 2022, 12:10 p.m.

Fintech major Paytm’s Chief Executive Officer and Founder Vijay Shekhar Sharma said that he will be granted his employee stock options (ESOP) only when the market capitalisation of the company crosses the level it was at during the initial public offering.

The firm had granted ESOPs to Sharma for the first time since the founding of the company in September 2021.

Paytm had offered shares to the public at Rs 2,150 apiece at a market valuation of Rs 1.39 lakh crore. The stock has been on a downward trend since its listing in November 2021 and has fallen more than 70 percent with market capitalisation watering down to Rs 41,000 crore.

“Against the backdrop of volatile market conditions for high growth stocks globally, our shares are down significantly from the IPO price,” Sharma said in a filing to the stock exchanges.

Paytm had granted stock options to employees ahead of its IPO from the 4 percent equity holding of Sharma in One 97 Communications.

Shares of the company have fallen on the back of receding interest among investors for loss-making growth companies in light of higher interest rates, confusion about Paytm's road to profitability, and recent regulatory actions against the company.

"Dabbling in multiple business lines inhibits PayTM from being a category leader in any business except wallets, which are becoming inconsequential with the meteoric rise in UPI payments," brokerage firm Macquarie had said in a recent note.

Sharma assured investors that the entire Paytm team is committed to building a large, profitable company and creating long-term shareholder value.

The company recently was curtailed by the Reserve Bank of India from onboarding new customers through its Paytm Payments Bank because of "serious supervisory concerns" and ordered an IT audit from an independent auditor approved by the central bank.

Despite the regulatory hurdles, Sharma said that Paytm will achieve breakeven in operating profit before accounting for cost of ESOPs in next six quarters.

"Importantly, we are going to achieve this without compromising any of our growth plans," Sharma said.

At 10:55 am, shares of Paytm were up 2.9 percent at Rs 626.55 on the National Stock Exchange.

Author : Rajdhani Delhi Representative

Rajdhani delhi representative

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