ixigo, one of India’s leading traveltech companies, has announced the approval of its Employee Stock Option Scheme (ESOS) 2025. The board of directors has sanctioned a pool of 1.2 crore stock options to reward and retain key employees. The options will be granted at an exercise price of Rs 93 per share, matching the company’s IPO issue price.
The ESOS 2025 will vest based on valuation milestones. If ixigo achieves a market capitalization of Rs 9,000 crore within 33 months, 50% of the options will vest. The remaining options will vest if the valuation reaches Rs 14,000 crore within 69 months. If these targets are not met, unvested options will lapse.
The scheme will also extend to employees of ixigo’s subsidiaries and holding companies, pending shareholder approval. Co-founders Aloke Bajpai and Rajnish Kumar are expected to receive grants equal to at least 1% of the company’s issued capital. This strategic move aims to align employees’ interests with the company’s long-term growth.
1. ixigo: A Traveltech Leader
1.1 Working Model
ixigo operates as an online travel aggregator (OTA), offering users a one-stop solution for booking flights, trains, buses, and hotels. The platform utilizes artificial intelligence (AI) and machine learning (ML) to provide personalized travel recommendations. ixigo’s mobile app serves as a comprehensive travel assistant, helping users track real-time updates on bookings, train schedules, and airline fares.
1.2 Revenue Model
ixigo earns revenue through multiple streams:
- Affiliate Commissions: It earns commissions from airlines, hotels, and bus operators for bookings made through the platform.
- Advertising: The platform generates income from sponsored listings and ads from travel service providers.
- Freemium Services: While the basic services are free, ixigo offers premium features such as ad-free experiences and priority customer support.
- Partnerships: Strategic partnerships with banks and financial institutions provide exclusive travel deals, generating additional revenue.
2. Founders and Funding Background
2.1 Founders’ Background
ixigo was co-founded in 2007 by Aloke Bajpai and Rajnish Kumar. Bajpai, an alumnus of IIT Kanpur and INSEAD, brings deep expertise in technology and business strategy. Kumar, also from IIT Kanpur, has played a crucial role in the company’s technological advancements.
2.2 Funding and Growth
The company has raised over $96.5 million in funding from investors, including Sequoia Capital India, Elevation Capital, and GIC Singapore. ixigo went public in June 2024, listing on the NSE and BSE. In Q3 FY25, it reported a revenue of INR 242 crore, marking a 41.5% YoY increase, though net profit declined by 49.3% to INR 15.5 crore.
3. ESOS 2025: Key Terms and Market Impact
3.1 Grant and Vesting Structure
- The scheme offers 1.2 crore stock options, each convertible into one equity share.
- The exercise price is set at INR 93 per share, aligning with ixigo’s IPO issue price.
- Options will vest only if the company meets valuation milestones:
- INR 9,000 crore market capitalization in 33 months: 50% vesting
- INR 14,000 crore market capitalization in 69 months: Remaining 50% vesting
- If these targets are not met, unvested options will lapse and return to the ESOS pool.
3.2 Extension to Subsidiaries and Founders’ Allocation
ixigo has proposed extending ESOS 2025 to employees of its subsidiaries and holding companies. Additionally, co-founders Aloke Bajpai and Rajnish Kumar may receive grants equal to or more than 1% of the company’s issued share capital, subject to shareholder approval.
3.3 Regulatory Compliance
The scheme complies with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. The board has also approved a postal ballot notice for shareholder consent.
4. Strategic Importance of ESOS 2025
The new ESOS plan aims to:
- Retain and Motivate Employees: By offering stock options, ixigo ensures that key executives stay committed to the company’s long-term vision.
- Align Employee and Shareholder Interests: The vesting schedule is designed to incentivize executives to drive company growth.
- Enhance Market Position: A motivated workforce contributes directly to customer satisfaction and innovation, strengthening ixigo’s competitive edge.
5. Learning for Startups and Entrepreneurs
- Employee Incentives Drive Performance: Equity-based compensation keeps employees engaged and invested in company growth.
- Clear Vesting Milestones Encourage Long-Term Goals: Defining valuation targets ensures employees work towards increasing company value.
- Regulatory Compliance is Essential: Adhering to SEBI guidelines strengthens investor confidence and ensures transparency.
- Market Capitalization-Based Vesting Can Align Leadership Focus: When stock options vest based on valuation, executives prioritize scaling the business.
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