Last year, startups bought back ESOPs valued more than $400 million.
- ByStartupStory | January 24, 2022
Bengaluru: According to a survey on startups by Nasscom and consultancy firm Zinnov, Indian entrepreneurs purchased back over $400 million in ESOPs in 2021. These buybacks helped over 10,000 employees. According to the study, Sebi’s updated procedures have increased the ESOP pool to $900 million.
Last year, the Securities and Exchange Commission (Sebi) revised its regulations to allow ESOPs to be offered to employees on contracts and those on probation prior to confirmation.
Employee stock options have been bought back by many new-age companies as a form of compensation. ESOPs have become an important part of the remuneration strategy of new-age firms as a tool for retaining personnel. BrowserStack ($50 million), Swiggy ($40 million), Upgrad ($29.5 million), Zerodha ($27 million), Udaan ($23 million), and ShareChat ($19 million) are among the 50 businesses with significant ESOP buybacks, according to data.
Flipkart bought back ESOPs worth Rs 600 crore ($80.5 million) last year, making a lot of people wealthy. Employee shares worth Rs 48.7 crore were bought back by Simplilearn. The buyback price was Rs 63,500 per option, according to Simplilearn CEO Krishna Kumar. Some of the first employees were given choices for as little as Rs 10 each. Those who were given options four years ago received them at a cost of Rs 11,600 each.
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