Paytm CEO Vijay Shekhar Sharma Settles ESOP Case with SEBI

Paytm founder and CEO Vijay Shekhar Sharma has settled an ESOP-related case with the Securities and Exchange Board of India (SEBI). Under the settlement, Sharma is barred from receiving any fresh employee stock options (ESOPs) from listed companies for the next three years.

As of 9:41 AM on May 9, 2025, One97 Communications share price was trading at ₹840.20, a 0.60% increase, with a 2.44% gain over the past six months and a 152.31% rise over the past year.

Timeline and Context

In October 2021, One97 Communications (Paytm’s parent company) issued 21 million ESOPs to Vijay Shekhar Sharma. His brother, Ajay Shekhar Sharma, who serves as the company’s Chief Business Officer, was allotted 2.62 lakh ESOPs in May 2022. SEBI found these issuances to be in violation of its rules, which prohibit influential shareholders from receiving ESOPs.

Sharma held a 14.7% stake in the company a year before Paytm’s IPO. To meet ESOP eligibility norms, he reduced his shareholding to 9.1% by transferring 3.09 crore shares to Axis Trustee Services, which acted on behalf of the Sharma family trust. SEBI later objected to this classification and said the disclosures in the IPO documents were incorrect.

Penalties and Settlement Amounts

As part of the settlement, One97 Communications cancelled the ESOPs granted to both brothers. Vijay Shekhar Sharma paid a settlement amount of ₹1.11 crore. Ajay Shekhar Sharma paid ₹57.1 lakh and also returned ₹35.86 lakh as disgorgement for gains made from selling 3,720 shares obtained through the exercised ESOPs.

The company also recorded a one-time expense of ₹492 crore in its books after cancelling Vijay’s ESOPs.

Regulatory Action

SEBI’s order bars Vijay Shekhar Sharma from accepting any new ESOPs from any listed firm for the next three years. There is no designated successor to the cancelled ESOPs, and the case stands closed post-settlement.

Read more: Paytm Share Price Rises 5.48% on May 7 Amid 5% Revenue Growth in Q4 FY25!

Conclusion

The settlement resolves SEBI’s investigation into violations related to share-based benefits at Paytm. All disputed ESOPs have been withdrawn, and penalties have been paid by the involved parties.

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