Frequently asked questions
ESOP stands for Employee Stock Option Plan that gives the workers a benefit of ownership interest in the company. A lender funds an employee to exercise his/her vested shares under Employee Stock Option Plan by asking to pledge those receivable shares at the time of allotment.
Any employee of the companies approved by Bajaj Finance Limited can avail of funds for ESOP.
The minimum and maximum loan amounts for ESOP finance are Rs. 1 lakh and Rs. 175 crore, respectively.
Bajaj Finance provides the loan up to 40% of the ESOP value.
The tenure for ESOP financing ranges from 7 days to 36 months.
Here are the charges to avail of ESOP financing:
- Rate of interest
- Processing fees
- Pledge/ unpledged charges
- Demat account opening charges
- AMC charges for Demat account
- Documentation charges
The employee submits an ESOP financing application, grant letter, and pledge form. After verification, a POA-based Demat account is opened, funds are paid to the employer, shares are allotted and pledged in favour of the lender.
Interest is calculated based on the tenure you opted for ESOP financing at the time of application. However, Bajaj Finance charges a minimum of 30 days of interest if the loan is repaid within 30 days.
Yes, you may apply for ESOP financing multiple times if your loan account is active with Bajaj Finance Limited.
If you are planning to buy ESOP of any of the approved list of companies, Bajaj Finance can help finance your purchase. You can get a loan amount ranging from Rs. 1 lakh to Rs. 175 crore at an interest rate of 8% to 15% per annum.
No. ESOP Funding is available for the companies listed stock exchanges and subject to approval from credit team of Bajaj Finance. Check the list of companies eligible for ESOP funding.
No additional security / collateral is needed to be provided, apart from the shares against which the ESOP funding is granted.
An ESOP's benefit is that it enables staff members to purchase shares or ownership in the business they support. You get stock in the business after joining as an employee.
The eligibility criteria for ESOP financing with Bajaj Finance are:
• Nationality: Indian
• Employment: Salaried or consultants with the company
• Age: 21 years to 70 years
To apply for ESOP financing, click on the ‘Apply’ button on the page. You will be redirected to our form, where you will have to fill your personal details and the value of your shares.Once all your details have been verified through an OTP, sent on your phone, our representative will contact you for further processing of your application.
The documents required to apply for ESOP financing with Bajaj Finance are:
• PAN
• Valid address proof
• Live photograph
• Bank proof
• Signature image on white page
Multiple companies offer ESOP facility to incentivize and retain their employees, especially key employees who are crucial to the success of the business. ESOPs provide employees with the opportunity to buy company stock at a discounted price or to receive stock as part of their compensation package.
For ESOP financing Bajaj has identified a list of companies. All employees of the company eligible for ESOP can get loan to buy the ESOP.
Click here to see the list of companies.
ESOP financing enables employees to exercise stock options using borrowed funds. The lender pays the exercise amount to the employer, shares are credited to a pledged Demat account, and the employee repays the loan as per agreed terms.
An ESOP can be financed through leveraged, non-leveraged, seller-financed, or hybrid structures. Companies may borrow funds or contribute cash or shares to help employees acquire ownership, while ensuring compliance with legal and tax regulations.
Bajaj Finance offers interest rate of up to 14% p.a. for ESOP financing. Other fees and charges applicable include processing fees, legal charges, stamp duty (if applicable) etc.
Yes, Bajaj Finance charges a processing fee of up to 4.72% of the loan amount (inclusive of applicable taxes).
The fees and charges associated with ESOP financing are mentioned above. It's important to carefully consider the interest rate and any fees associated with a loan before accepting it to understand the full cost of borrowing and ensure that the terms are reasonable and affordable.
Yes, ESOP financing can usually be prepaid without any foreclosure charges. You can repay the loan early, partly or fully, without penalty. This lets you clear your dues as soon as you sell or exercise your ESOPs.
Bajaj Finance generally approves ESOP financing quickly after verifying ESOP allocation, vesting status, and employer eligibility. Once documentation is complete, approval can be issued within a short turnaround time, followed by disbursal based on your ESOP value.
If ESOP value drops, you may face a margin call asking you to provide extra security or partially repay the outstanding amount. This protects the lender against the reduced share value, and timely response avoids penalties.
Main risks include market volatility, margin calls due to drop in share value, and interest cost during tenure. If the stock underperforms, selling may not cover the full repayment, requiring you to arrange additional funds to close the loan.
Yes, consultants or contractors who receive ESOP allocations from eligible companies may apply for ESOP financing. Approval depends on vesting, employer eligibility, and share liquidity. Lenders evaluate employment type but may still offer financing if criteria are met.
Bajaj Finance calculates the loan amount based on the current market price of vested ESOPs, company eligibility, and applicable loan-to-value (LTV) ratio. The higher the share value and liquidity, the greater the eligible financing offered against the ESOPs.
