The Economic Times daily newspaper is available online now.

    Zerodha’s Rs 60-65 crore Esops buyback plan values firm at $1 billion

    Synopsis

    The quantity of shares an employee can sell will be based on performance.

    ESOPGetty Images
    The buyback is intended to provide senior management and long-term staffers with liquidity options as Zerodha celebrates its 10th anniversary later this year, the company said.
    Bengaluru | Mumbai: Discount brokerage Zerodha will spend Rs 60-65 crore to buy back employee stock ownership plans (Esops) this year, at a self-assessed enterprise value of Rs 7,000 crore, or around $1 billion. This is significant because it’s the first time that a valuation is being ascribed to Zerodha, which has never picked up external capital.

    The buyback is intended to provide senior management and long-term staffers with liquidity options as Zerodha celebrates its 10th anniversary later this year, the company said.

    Zerodha created an Esop pool of around Rs 200 crore last year and will permit employees to sell 5-50 per cent of the 33 per cent of their shares that will vest this year. The quantity of shares an employee can sell will be based on performance, it said.

    The buyback is being done at more than four times its book value, or Rs 700 per share, and is expected to benefit around 700 employees. It will, however, be concentrated among 30-40 of them, Zerodha CEO Nithin Kamath told ET in an exclusive interaction. “It’s been a decade since we started, and we have not raised any capital and don’t have any intention to raise for the next few years. So, we thought this was a good time to give liquidity to people who have been around with us for a while,” said Kamath, adding that its $1 billion valuation was a fair and conservative estimate.
    z-graph

    Zerodha has seen strong traction over the past three months as new user signups have soared due to the volatility in the market. It saw over 300,000 new signups in March, and close to 200,000 per month in April, May and so far in June, largely led by first-time investors.
    « Back to recommendation stories
    I don't want to see these stories because
    SUBMIT

    As younger investors come on board — the average age of investors has fallen to 28 years from 32 years earlier — the average size of equity investment has also dropped to Rs 15,000 now from around Rs 25,000 last year.



    (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2024 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more


    (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2024 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
    The Economic Times

    Stories you might be interested in