47 employees of Paytm’s parent company – One97 Communications – have taken advantage of the company’s meteoric surge by selling their shares for a whopping Rs 100 crore.
According to a report in The Economic Times, the employees sold their shares to both internal and external buyers, who declined to divulge their names.
A representative of Paytm told The Economic Times that over 500 employees hold close to 4% of all the shares in the parent company.
Earlier this March, Chinese e-commerce giant Alibaba invested $250 million in One97, buying out shares of investors such as Reliance Capital, Saama Capital, who made a 27-fold return on their original investment, through the deal.
The decision to offer employee stock options or “ESOPS”, was used by Paytm in order to attract the best and most qualified people to work for them.
Paytm calculated the eligibility for awarding ESOPS based on multiple factors, including an individual's contribution to the company, duration of employment and their long-term potential.
Amit Sinha, senior vice-president of One97.ESOPS have helped us in acquiring excellent talent from the industry, and this adds to their drive to innovate and disrupt. Our stock option has been active for the last 6-7 years.
In the wake of demonetisation of high value currency notes last year, Paytm emerged as one of the biggest winners, as PM Modi’s efforts to establish a cashless economy played right into their hands.
As the valuation of the company skyrocketed, so did its shares. Experts tracking the company’s performance have said that the share prices usually rise in such a manner when the demand completely outstrips the supply.
In 2016, many Paytm executives sold part of their ESOPS to the company's external board members like Google and Uber.
Close to a 100 employees have exercised the option to sell their shares. Paytm has raised Rs 543 crore from parent company One97 Communications, and founder VIjay Shekhar Sharma.