Stock options are making a comeback. Here's why
and markets calibrate their share values, employee stock options or ESOPs are increasingly being seen as a lucrative perk for those being hired in top positions. The period January-May 2024 has seen 340.5 million shares being allotted through ESOPs by 461 listed companies, according to an analysis by Mint of data from Capitaline database. The same period last year had seen 253.9 million ESOP allocations by 382 companies.
Zomato led the way with 116 million ESOPs granted between 8 February and 8 May. Other notable issuances include Eco Hotels with 20.4 million ESOPs on 10 February, CMS Info Systems with 6.25 million ESOPs granted between 3 January and 28 February, Infibeam Avenues with 3.6 million ESOPs issued on 20 March, and Home First Finance with 3.1 million ESOPs granted between 18 January and 8 May. Multiple factors have contributed to the increased interest in ESOPs.
"The recent surge in the stock market for SMEs, as well as nearly all technology companies, along with the upcoming revival in the startup ecosystem, have reignited interest in startup ESOPs," said Anirudh Damani, managing partner at Artha Venture Fund, which has invested in startups like LenDenClub, Agnikul, Fantasy Trading League, Onsite, StepSetGo, among others. The rise in initial public offerings or IPOs is another factor. According to Primedatabase, 76 Indian corporates raised ₹61,915 crore through main board IPOs in financial year 2023-24, 19% higher than the ₹52,116 crore mobilized by 37 IPOs in 2022-23.
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