Sriharsha Majety & Nandan Reddy on ESOPs & Ownership

IPO documents showed Majety holding 6.23% and Reddy 1.76% on a fully diluted basis, but Majety's direct stake was only 0.87% with the remainder coming through special grants and vested ESOPs — and nearly all of Reddy's stake came through ESOPs, a structure that complicates founder economics versus the typical Indian promoter.

The Arc article notes that ESOPs in India carry a tax wedge: when options are exercised the difference between exercise price and fair market value is taxable to the holder, which is why founder share sales around IPO are often technically a tax-management exercise rather than a directional signal about conviction.