Paytm to help employees exercise ESOPs ahead of IPO

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In July, Paytm had filed the draft red herring prospectus (DRHP) for its Rs 16,600 crore IPO, which is expected to be India’s biggest public issue so far.

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Paytm is working to help employees exercise their stock options, ahead of the company’s planned initial public offering (IPO).

One97 Communications, Paytm’s parent company, is in talks with five lenders to let staff borrow money to exercise their employee stock options (ESOPs) and make tax payments if required, Mint has reported.

The company might facilitate a loan size of Rs 100 crore, which would help 300-500 employees who have vested options. The loans will likely be issued for a period of one year, according to the report.

“Paytm (One97) is in talks with financing institutions such as IIFL, ICICI Bank and Edelweiss Capital to help its employees convert their employee stock ownership plans into shares and provide them loans to pay for exercise price and tax payments. These loans are expected to be of the duration of 12 months,” a source told the publication.

“The One97 management is also in talks to absorb the interest costs of the loans being provided to employees. The final names of the lenders and total credit size is expected to be decided this week,” another source said.

In July, Paytm had filed the draft red herring prospectus (DRHP) for its Rs 16,600 crore IPO, which is expected to be India’s biggest public issue so far.

Moneycontrol recently reported that Paytm is planning to expand its ESOP pool from 24,094,280 equity options to 61,094,280 equity options at a face value of Rs 1 each.

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