Demand for employee stock option plans of 4 top IT firms up 100%
With a bounce-back in the equity markets, there is a sudden rush for employee stock option plans (Esops).
Employees of both new and old economy companies are equally enthusiastic about the instrument.
Esops of four frontline infotech firms evoked a good response in 2002-03. Infosys Technologies, Wipro, Satyam Computer and Digital Global have reported an over 100 per cent rise in demand and allotments.
This year, Infosys, under its two Esops of 1998 and 1999, issued 56,948 shares valued at Rs 13.52 crore, against the 28,013 shares (Rs 4.6 crore) issued in 2002.
The firm issued 44,770 shares (27,983 shares in 2002) under Esop 1998 at a weighted average price of Rs 2,988 a share. It had issued 12,178 shares under the 1999 plan at an average price of Rs 3,754 a share.
Wipro employees also think company stock is a good bet, despite the drubbing it received in the secondary markets.
The firm has issued 201 per cent more shares under its Esop, from 32,670 shares in 2001-02 to 98,303 shares in 2002-03.
It issued 97,903 shares worth Rs 10.57 crore (32,670 shares, Rs 3.61 crore) under its 1999 plan. Wipro issued 400 shares (nil in 2002) under its 2000 plan.
The soaring market price of Digital Global encouraged its employees to exercise their Esop options in 2002-03. Allotments in 2003 saw a manifold rise from a meagre 375 shares in 2002 to 250,157 in 2002-03.
Satyam Computer, however, lagged with only 2,800 shares converted under its Esop plan 2000 (nil in 2002).
The company offered 13 million shares under its Esop-B and 2.57 million American depository shares (representing 5.15 million equity shares) under its Esop-ADS.
However, the overall trend in Esops has not been encouraging. Infosys earmarked 8.2 million shares for allotments under Esop, of which only 104,278 shares (1.27 per cent) were issued till March 2003. Around 6.31 million shares were outstanding for conversion at the end of the year.
Of the 14.6 million shares offered by Wipro in 2002-03, only 245,000 were exercised. Digital GlobalSoft earmarked 3.27 million shares, of which 250,000 were issued and 2.22 million options were in force.
Satyam Computer offered 18.15 million shares to its employees, of which only 2,800 shares were issued and around 17 million were outstanding at the end of March 2003.
As far as old economy firms were concerned, cement major ACC offered 1.63 million shares under Esop 2000 and 1.5 million each under its Esop 2001 and 2002.
Until March 2003, only 251,224 shares were issued, amounting to Rs 2.73 crore, while 2.03 million were outstanding for conversion.
In the current financial year, HDFC Bank allotted 670,000 shares valued at Rs 10.87 crore under its three Esops.
Around 6.6 million shares were outstanding at the end of March 2003. Till date, HDFC has issued 3.34 million shares under its Esop 1999, valued at Rs 79.5 crore.
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