Why firms are doubling down on Esops

Esops fuel India Inc.'s pay shift Issuance of Employee Stock Options.

- Mayur Bhalerao

In a year defined by global uncertainty and volatile stock markets, one corporate trend in India has stood out with striking clarity: the resurgence of employee stock options (Esops).

Once seen as the preserve of startups and Silicon Valley-style unicorns, Esops are fast becoming mainstream across traditional businesses. Participation and volumes have surged over the past five years, transforming Esops into a central plank of compensation strategies across traditional Indian businesses.

The numbers tell the story. A Mint analysis of Capitaline data shows that in 2020, just 299 companies allotted 282.5 million shares. By 2024, that had risen to 666 firms issuing 1.4 billion shares—a nearly fivefold increase.

The momentum has only strengthened this year: between January and August, 663 listed companies issued 902 million shares, sharply higher than the 583 companies and 626 million shares seen in the same period last year. The most striking shift is the expansion of Esops into middle and even junior layers of organizations.