Vijay Shekhar Sharma's stake in Paytm parent may go up

Paytm founder Vijay Shekhar Sharma's stake in parent company One97 may rise before IPO

The Paytm founder has a stake of roughly 14.6% in One97 Communications, which could rise another 2-4%

Paytm founder Vijay Shekhar Sharma. Credit: AFP File Photo

Paytm founder Vijay Shekhar Sharma might soon be "rewarded" with an increased stake in the payment platform's parent company One97 Communications.

Sharma, founder of one of India's largest fintech platforms, had in the past given 4 per cent of his equity, before the company's Employee Stock Ownership Plan (ESOP) was formed, sources told Business Standard. "So technically, till sometime back, people got his shares as their ESOPs," a source told BS.

An ESOP is an employee benefit plan that gives workers ownership interest in the company.

“Vijay has never taken any ESOPs in the past. The existing shareholders see this as a reward for the incredible work he has done in creating a payments and financial services leader in Paytm,” said another source was quoted saying.

The Paytm founder presently has a stake of roughly 14.6 per cent in One97 Communications which could rise another 2-4 per cent, according to the report.

Paytm doubled its ESOPs pool earlier in August from 4,094,280 to 61,094,280, a move approved by shareholders in September 2021.

These developments take place in light of the company filing the draft red herring prospectus (DRHP) for an IPO seeking to raise over $2 billion.

Sharma is understood to be selling a part of his stake in the company via offer for share (OFS), after which he will still retain a substantial stake in the company.

Other investors who will sell part of their stakes in the company include Alibaba Group, Ant Group and Softbank.

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