Online investment platform Upstox is going to execute a share buyback plan worth around Rs 29 crore or $4 million from its founders and employees. This buyback appears to include the first ESOP liquidity program being executed by the company since its inception.
The board at Upstox has passed a special resolution to approve the buyback of 286,598 equity shares from existing shareholders, regulatory filings show. It further added that the Mumbai-based company will be executing the buyback at a price of Rs 1,007 per share valuing the buyback at Rs 28.86 crore (19.93% of the paid-up equity capital and free reserves.)
Importantly, around 61.2% of the total buyback amount i.e Rs 17.65 crore worth shares are to be bought back from the promoters or founding team of Upstox: Ravi Kumar, Shrinivas Vishwanath, Kavitha Subramanian. The buyback will also include vested ESOP options from the employees of the company.
As per Fintrackr’s calculation, the group currently holds around 39.86% equity in the company on a fully diluted basis.
In November last year, Upstox had picked up $25 million from existing investor Tiger Global at a valuation of $3.3 billion. The company turned unicorn during the tranche and also became the most valued company in the segment surpassing Groww and bootstrapped company Zerodha. Entrackr had exclusively reported the development.
Further, the board has also passed another resolution approving a grant of a loan of Rs 50 crore to its subsidiary RSKV Commodities for a tenure of 24 months at an interest rate of Rs 7.5% per annum.
Upstox allows retail investors to trade in the equity market through the platform and mutual fund investments, futures and options trading. Besides Zerodha and Groww, it also competes with Ashish Kashyap-led INDmoney which recently closed a $86 million Series D round at $650 million valuation.
For the fiscal year ending on March 31, 2021, Upstox had recorded more than 200% jump in its operating revenue to Rs 385.6 crore from Rs 125 crore in the preceding fiscal year. The company has incurred a loss of Rs 71.68 crore in FY21 as compared to Rs 38 crore in the previous year. It’s worth mentioning that Upstox was profitable in FY19.