Godrej Consumer Products is quoted at Rs444. Some employees have got stock grants at Re1!
Godrej Consumer Products (GSPL), a fast moving consumer goods company, recently filed the details of its Employee Stock Grant Scheme 2011 (ESGS 2011) with Bombay Stock Exchange (BSE). What caught the eye of Amit Bagaria, a smart investor, was the exercise price at which employees can exercise their stock options. The filing said, “The Exercise Price shall be Re1 per equity share. The equity shares vested in the eligible employees shall be allotted on payment of the Exercise Price.” When we first heard about it, we thought it was a typo or a joke. No, it wasn’t; we checked the BSE site and confirmed it.
You can check the link for yourself here: http://www.bseindia.com/stockinfo/anndet.aspx?newsid=6c92015f-7948-4d5f-ae81-9bce82497a3d
The company will offer certain employees shares of the company at a mere Re1 per share. This means, the company is rewarding certain employees by giving them shares in the company at a fairytale price, one which we can only dream of.
The filing said “Godrej Consumer Products has informed BSE that in terms of Employee Stock Grant Scheme 2011 (ESGS 2011), the HR & Compensation Committee vide resolution dated March 07, 2012 approved the granting of 4470 Stock Grants to Eligible Employees of the Company.”
Each stock grant represents one equity share of the company. GSPL will to award 4,470 equity shares at virtually free prices, to certain employees, though the beneficiaries will have to collectively fork out a measly Rs4,470 out of their own pockets to acquire these grants.
Further, the company had outlined the dates at which the employees would be permitted to exercise their stock options. The first batch of 894 grants should be exercised not before 6 March 2013. The second batch of 1,788 grants not before 31 May 2013 and finally the last 1,788 grants will be exercised only on or after 31 May 2014. This dilution of shareholding vis-a-vis stock grants works against the common shareholder while the beneficiaries are getting sumptuous free lunch.
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The court ruling is considered as a moral victory for the MCX SX, promoted by Jignesh Shah of Financial Technologies India (FTIL), which all along has been maintaining that the regulator did not give a fair hearing to its application
Mumbai: The Bombay High Court today asked the markets regulator Securities and Exchange Board of India (SEBI) to reconsider MCX’s stock exchange application in one month and set aside its earlier order, reports PTI.
Justices DY Chandrachud and Anoop V Mohta passed the order today after hearing an appeal filed by MCX-SX in October 2010 against market regulator for rejecting its application to set up a new equities trading platform.
In the last hearing last November, the high court had reserved its judgment after the two parties—SEBI and MCX-SX—were unable to sort out the matter out-of-court.
The court ruling is considered as a moral victory for the MCX SX, promoted by Jignesh Shah of Financial Technologies India (FTIL), which all along has been maintaining that the regulator did not give a fair hearing to its application.
“The SEBI was, is, and will always remain a respected regulator. The MCX-SX stance was not against regulatory institution, but was for principles. We stand vindicated and always have full faith in our judiciary. We remain committed to growth and development of the country’s financial markets,” MCX-SX spokesperson said after the court order this morning.
The regulator SEBI could not be reached immediately for comments.