Effective use of Trust route

It was time post-Covid around 2021; the market was showing its price vagaries. A listed company (on NSE & BSE) was planning to leap into another phase of corporate growth that was on paper but yet to be made a reality on sustainable basis. An ESOP structure was planned basis different probabilities of growth.

The next critical question was “source of shares”, whether primary or secondary? I was solely responsible for this assignment. As we saw, share prices at throw away prices, there was a plan to use secondary shares acquired through an ESOP Trust. As the market was still unpredictable, a mix of primary share were also contemplated as a risk management. As the company has started to stepped into phases of growth, its share price has taken an in-line growth.

The company was able to use the market price fluctuation for the corporate growth and wealth creation for its employees with “minimal equity dilution” of Promoters/ Investors/ other shareholders.

A clear case of Win-Win.