Tata Capital beats TCS in giving Esops
Yassir A Pitalwalla

mydigitalfc.com [ Sunday, Sep 18, 2011 ]


Becomes first firm led by Ratan Tata to do so

Tata Capital, the unlisted wholly-owned subsidiary of the Tata group’s principal holding company Tata So­ns, has become the first co­mpany lead by its group ch­airman Ratan Naval Tata to issue employee stock opti­ons.

In doing so, the company has left behind the group’s most valuable listed company Tata Consultancy Services, which is mulling issuance of Esops as well. Top officials of Tata group and Tata Capital confirmed the issuance of Esops at the systemically important non-deposit taking non-banking financial services company that has seven business lines.

The NBFC has a distribution and broking business that also does commodity trading for retail and institutional custo­me­rs, retail finance, including passenger and commercial vehicle loans, personal loans, home loans, credit cards, consumer durable loans and investment banking. It also has a commercial finance business that finances small and medium enterprises, capital eq­uipment and in­frastructu­re; a wealth ma­nagement bu­siness and rural finance. Tata Capital also has a private equity business in India.

In an email response, a company spokesperson said, “Tata Capital does not wish to comment on the matter.” A top Tata Sons official that the issuance of Esops by Trent and Tata Capital did not represent a change in the group’s stance regarding a policy of not issuing Esops in a large way. “The view at the Tata group level continues to be that Esops is not something we will be doing in a big way as we don’t see much relevance of this as an instrument to attract and retain talent,” said the senior Tata Sons official.

Tata Capital has set for itself an aim to become the leading financial services company in India with a global footprint. It has attracted a team of top officials from both within and outside the group to make a success of the Tata’s re-entry into the financial services business.Tata Capital has, for lower level employees, a grant that allowed them to purchase up to 3,000 shares each of Tata Capital at a price that was at a slight premium to the face value, a top Tata official said.

“We also have Esop scheme where a trust grants senior employees who are eligible to receive more than 3,000 shares each, the option to buy shares at a price to be determined by a half yearly valuation to be conducted by an independent merchant bankers,” said a top Tata Capital official.

However, Financial Chronicle learns that many employees in its private equity division who may have a share in the fund’s profits may be excluded from the Esop scheme. “Pre-initial public offer TCS had made a stock grant at face value to several of its key officials,” said Harshu Ghate managing director at ESOP Direct.

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