Falling market attracts ESOP sell-off

As the market yo-yoed over the last few weeks, coming down from the high of July, many high-profile names of the corporate and financial sectors have found it a good time to sell shares in their companies that they had received under employee stock option schemes (ESOPs).

The list includes HDFC Chairman Deepak Parekh and ICICI Bank's Deputy Managing Director Nachiket Mor, Executive Director Madhabi Puri Buch and Chief Technology Officer Pravin Kumar Vora.

They have company in Axis Bank Chairman and Managing Director P J Nayak and Ambuja Cement's Managing Director P B Kulkarni and Director B L Taparia.  There are three chief financial officers in the list: Satyam Computers' V Srinivas, Infosys' V Balakrishnan and Larsen & Toubro's Y M Deosthalee.   Most of the companies allot shares to top employees at a highly-discounted price as a tool to make them stay with the company for as long as possible.   According to independent equity advisor S P Tulsian, "Employees selling shares allotted under ESOPs is not an illegal exercise unless they indulge in trading of shares, which can be termed as a bad practice."   Executives of ACC, Bharti Airtel, Dr Reddy's Laboratories, Grasim Industries, Hindustan Unilever, Ranbaxy Laboratories and Reliance Industries are in line to get shares under ESOP schemes that have been announced.