Employee stock options and the millionaires it created were hitherto fairy tale stories that were confined to the software industry in India.
The recently concluded Bharti Televentures IPO has changed all that and is slated to take employees of the telecommunications company into the big league of stock millionaires.
With the listing of the company's stock today on the National Stock Exchange and the Bombay Stock Exchange, the company has in its fold three millionaires to whom employee stock options have been granted.
A further 28 potential millionaires are also to be created when Esops are granted to senior managerial positions in the company and its subsidiaries, as stated in the IPO prospectus.
The Bharti Mittal family, based on their holding in Bharti Televentures, is now worth Rs 1,812.53 crore based on their 46 per cent stake in Bharti Telecom, the promoter of Bharti Televentures.
Bharti Televentures has created an employees trust and has initially transferred about 1.584 crore shares, representing 0.85 per cent of the total equity of the company, to the trust.
The Bharti Televentures Employees Welfare Trust will grant stock options to the employees of the company at half the issue price of Rs 45, which works out to Rs. 22.50.
The trust as per the Bharti Televentures prospectus has yet to grant options to all its employees but the three senior managers of the company who have been granted options have garnered a substantial portion.
The trio of employees, Akhil Gupta, Anil Nayar and Badri Agarwal have alone been allotted about 22 per cent of the total shares initially transferred to the trust.
The three together today are estimated to be worth about Rs 16 crore calculated based on the closing price of Rs 44.15 and have between them 34,93,778 equity shares of the company. The joint managing director, Bharti Televentures, Akhil Gupta, if he exercises the entire options granted to him, will be worth Rs 8.47 crore.
This includes a component of 80,000 equity shares which he can subscribe to at a special price of Rs 10 per share and which includes a bonus component of 8,00,000 equity shares. This means that Akhil Gupta stands to gain 8,00,000 shares for next to nothing as Bharti recently had announced a 1:10 bonus issue.
Apart from the three employees already granted options, there are another 28 senior managerial personnel in Bharti Televentures and its subsidiaries like Bharti Cellular Ltd, Bharti Telenet Ltd, Bharti Mobile, Bharti Mobinet, Bharti Mobitel, Bharti Telesonic, and Bharti Broadband Networks who are also eligible for stock options of 80,000 shares and the resultant bonus issue.
Sunil Mittal, as per the prospectus document was allotted 2,75,000 equity shares of Bharti Televentures on September 29 and 30, 2001, just a day before and on the day of the bonus issue.
It is not clear from the prospectus document whether Sunil Mittal is also eligible for the bonus issue of 10 additional shares for every share held, but if he is eligible then he is worth about Rs 13.35 crore based on this allotment alone.
Sunil Mittal also is the promoter of Bharti Telecom, which has a 46.40 per cent stake in Bharti Televentures.
The other two senior employees Anil Nayar-President (Cellular Services) and Badri Agarwal -- president (access, long distance and broadband services) are worth Rs 4.30 crore and 2.65 crores at the closing price Rs 44.15 on the BSE today.
