Rs 515 crore Esops in 4 months

With share prices on the markets booming, employee stock option plans (Esops) have suddenly become hot again.

According to data culled from the Bombay Stock Exchange and the National Stock Exchange websites, 26 companies have so far allotted 11.297 million shares to eligible employees during the last four months, putting almost Rs 515 crore in their hands.

Though Esops were a hot favourite of IT and other knowledge industry companies, employees of brick and mortar companies, too, have climbed aboard the Esops bandwagon.

The Esops of banks have evoked a good response from employees on account of the sharp turnaround in the banking industry's outlook. Six banks allotted 4.98 million shares to eligible employees in the last four months, valued at Rs 184 crore. And, as many as 16 infotech companies allotted a total 5.21 million shares to employees, valued at Rs 285 crore.

Four old economy companies, ACC, Gujarat Ambuja Cement, ITC and Ranbaxy Laboratories, allotted 1.10 million shares, currently valued at Rs 45 crore, to their employees. Gujarat Ambuja Cement allotted 549,000 shares to its employees, ACC 390,000 and ITC 121,000.

Employees of ICICI Bank rushed to exercise their options "" they got 2.06 million shares valued at Rs 60 crore. HDFC Bank allotted 1.31 million shares valued at Rs 50.23 crore and HDFC employees exercised options for 833,000 shares, valued at Rs 53.34 crore. The employees of Kotak Bank were allotted 306,000 shares and UTI Bank 421,000.

The mad rush to issue shares to employees was noticed in frontline software firms such as Infosys Technologies, HCL Infosystems, Satyam Computer and Digital Global. Infosys Technologies allotted 196,671 shares under Esops valued at Rs 104 crore. Digital Global employees exercised 736,881 shares valued at Rs 61.57 crore.

HCL Infosystems allotted 417,055 shares to its employees valued at Rs 24 crore. Satyam Computer, too, allotted 1.65 million shares valued at Rs 51.28 crore. Wipro, however, allotted only 27,770 shares to employees in the last four months.

The overall trend in Esops was not encouraging in 2002-03. Infosys earmarked 8.2 million shares for allotments under Esops, of which only 104,278 shares (1.27 per cent) were issued till March 2003. 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. Satyam Computer offered 18.15 million shares to its employees, of which only 2,800 shares were issued.