a significant fundamental devolopmentNSE:BANDHANBNK there has been a devolpment which should bring a change in attitude towards bandhan bank as an investment in my sense kindly read below
Sub.: Grant of stock options under Bandhan Bank Employee Stock Option Plan Series 1
(‘ESOP Series 1’)
Pursuant to the applicable provisions of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (‘SEBI LODR’), this is to inform that the Board of Directors
of Bandhan Bank Limited (‘Bank’), at its meeting held on December 24, 2024, granted
2,96,353 equity stock options of the face value of Rs. 10 each (‘ESOPs’), at the grant price of
Rs. 164.38 (Rupees One Hundred Sixty Four and Thirty Eight Paisa only) per option to Mr.
Ratan Kumar Kesh, Executive Director & Chief Operating Officer (‘ED&COO’) of the Bank
when the esop has been granted at current market price my observation are as stated below
Granting ESOPs at the Current Market Price:
The exercise price of ₹164.38 matches the stock's closing price on December 23, 2024. This means employees will not receive the options at a discount. They can only profit if the share price increases above this level in the future.
This practice indicates confidence in future growth but does not offer immediate financial advantage to the recipient unless the stock appreciates.
Incentive for Performance:
Employees are motivated to focus on long-term goals that drive the stock price upward.
Since the options are granted at the market price, there’s no immediate gain; the payoff is tied to delivering meaningful results over time.
Alignment with Shareholders:
Leaders now have a vested interest in improving the company’s financial performance, as their personal gains are directly linked to shareholder returns.
No Immediate Dilution:
Since the ESOP is priced at the market value, it avoids concerns about significant undervaluation that could lead to larger dilution upon exercise.
Bandhan Bank shows confidence in its market valuation, signaling to investors that it believes the stock price will appreciate.
Shareholder dilution is minimal since the ESOP is priced at the prevailing market rate, meaning no intrinsic value exists at the time of the grant.
Granting ESOPs at the current market price is a strategic move that ties leadership rewards to future performance without offering upfront monetary benefits. It aligns executive incentives with shareholder interests and signals confidence in the bank’s growth trajectory, though its impact will be realized only over the long term.
