Mahindra To Give Rs 400-500 Crore ESOPs To 23,000 employees

In an industry-first initiative, Mahindra & Mahindra is launching a one-time Employee Stock Ownership Plan for about 23,000 employees, including factory floor workers, as a reward for their contribution to the company's growth journey, Group chief executive officer and managing director Anish Shah said.

The initiative covers three of Mahindra's key subsidiaries -- Mahindra & Mahindra (auto and farm sectors), Mahindra Electric Automobile, and Mahindra Last Mile Mobility, Shah said in an interview with PTI Videos.

This marks a rare -- and possibly first -- instance of a large Indian conglomerate extending employee stock ownership plans to shop floor workers. The shares will be granted in the form of restricted stock units.

"So this is something that I am very happy about and very proud about our company's culture because these ESOPs are for every single person in the company. This is effectively a token of gratitude, because their efforts have helped us do extremely well," he said.

He noted that the diversified conglomerate's market cap has grown 12 times since April 2020, a little more than five years and the group felt it was important to acknowledge this.

The total disbursement for 23,000 employees of M&M, which is a parent company, MEAL, which is an electric vehicle company, and the last mile mobility (vertical), would be in the range of Rs 400-500 crore, depending on factors, he said.

Employees on the permanent payroll with a minimum of 12 months' service within the group will be eligible to receive ESOPs.

Shah stated that the plan aims to reward long-term contributions and align employee efforts with the company's wealth creation.

"It (Rs 400 crore to Rs 500 crore) is a very significant amount, but as I look at it, overall, the value creation they (workers) have led is a lot more," Shah said.

Mahindra & Mahindra has posted a 24% year-on-year increase in consolidated net profit to Rs 4,083 crore for the June quarter, driven by broad-based growth across business verticals.

The company reported a net profit of Rs 3,283 crore for the April-June period of the last fiscal.

Total income from operations rose to Rs 45,529 crore in the June quarter against Rs 37,218 crore in the year-ago period.