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Nov 18, 2008, 02.02 PM IST | Source: CNBC-TV18

Esop plan won't result in big dilution: India Infoline

India Infoline has apparently cancelled its warrants to the CLSA institutional team which joined it a while back and the issue of ESOPs. Nirmal Jain of India Infoline, said the erstwhile CLSA team will stay with them. The company is planning new Esops as warrants deep out of money. The equity dilution will be lower under the new Esop plan.

Nirmal Jain, Chairman and MD, Indiainfoline

India Infoline has apparently cancelled its warrants to the CLSA institutional team which joined it a while back and the issue of ESOPs. Speaking on the same, Nirmal Jain, Chairman and MD, India Infoline , said the erstwhile CLSA team will stay with them. The company is planning new Esops as warrants are way out of money. The equity dilution will be lower under the new Esop plan, he said.

Here is a verbatim transcript of the exclusive interview with Nirmal Jain on CNBC-TV18. Also watch the accompanying video. 

Q: Why are you doing this and will the CLSA team stay on or will they leave after this?

 

A: They will stay on; there is no doubt about it. We are doing this because these warrants are way out of money. Infact the warrant exercise price is Rs 88 and the current market price is Rs 46. So if you force these warrants then probably they will leave because nobody can afford these kind of mark-to-market losses.

 

We are canceling these warrants so 10% money gets profited but in view of that we will give them stock option. So we have put new ESOP plan which is being presented to shareholders for approval on December 15.

 

After that, there will be a compensation committee and a board meeting which will give them ESOP which will be a strong enough incentive for these guys to have equity and stay on.

 

Q: Have you worked out the terms and conversion price of these new ESOPs because it will impact dilution as well for you?

 

A: Infact dilution maybe lesser because we had a dilution of warrant which will not happen. So if you notice we had 55 million warrants which are being canceled.

READ MORE ON  India Infoline, CLSA, Nirmal Jain, Esop
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