ESOP at a Funding Round: Series A, B and C in Pune

Take a 30-engineer SaaS company in the Rajiv Gandhi Infotech Park raising its Series A from a Bengaluru fund. Its scarcest asset is not cash, it is the staff engineers and product leads it must keep from walking across Hinjewadi Phase 1 to the next funded startup. The ESOP pool is how that company pays for loyalty in equity, and the funding round is the moment that pool is sized, topped up and, all too often, mis-priced against the founders. That is the work we do: size the pool to who you actually plan to hire in Pune, and protect the cap table while you do it.

Where this page differs from a generic explainer is the local mechanics. Pool percentages travel down a familiar ladder across Series A, B and C, but the filing lands with the Registrar of Companies, Pune, the special resolution goes out in Form MGT-14, and any allotment on exercise is returned in PAS-3 on MCA21. We treat the cap-table modelling and the Pune RoC paperwork as one engagement, so a Kharadi or Baner founder is never negotiating dilution in the dark and never scrambling on compliance after the wire lands.

The dilution scenarios are only as honest as the numbers behind them. Most of what we need a Hinjewadi or Baner founder already has sitting in a data room from the raise; gathering these five lets us run the maths the same week the term sheet arrives, not after it is signed:

• The term sheet — round size, pre/post-money valuation, and exactly how the lead (often a Bengaluru or Mumbai fund) has worded the pool ask.
• The live cap table — every founder, angel, the current ESOP pool and each grant already made to your product and engineering hires.
• An 18 to 24 month hiring plan — by role, weighted to the staff engineers, EMs and product leads Pune competes hardest for against Bengaluru and Hyderabad.
• The existing ESOP scheme and the board and shareholder resolutions that approved it.
• Any investor conditions on pool size, timing or pre-money treatment buried in the term sheet or side letter.

The headline percentages fall as a company grows, but the right number always traces back to the hiring plan, not the round name. Here is how that plays out for a typical Pune product company moving from its first institutional cheque to a growth round.

Once the pool is sized and the term sheet is closed, the statutory trail for a Pune private limited company runs in a fixed order. Get the sequence right and the round closes clean; miss a 30-day clock and the grants sit under a compliance cloud:

• Board resolution — the directors approve the scheme amendment and the new pool size.
• Special resolution under Section 62(1)(b) — shareholders approve the top-up in general meeting; the resolution is filed with the Registrar of Companies, Pune in Form MGT-14 within 30 days.
• Valuation — a registered-valuer or Rule 11UA valuation fixes the exercise price for the fresh grants.
• PAS-3 on allotment — when employees later exercise and shares are issued, the return of allotment goes to RoC Pune in Form PAS-3, and the SH-6 ESOP register is updated.
• DPIIT angle — Pune's dense base of recognised startups in Hinjewadi, Kharadi and Baner can lean on wider ESOP eligibility and the perquisite-tax deferral; we flag where your recognition opens up the pool design.

From the SaaS clusters in Hinjewadi and Kharadi to the engineering and manufacturing-software companies near Chakan/MIDC, the same handful of pool errors keep recurring. Here is what they cost and how we head them off before they reach the cap table.

Pune's startup map is no longer one place. The Rajiv Gandhi Infotech Park in Hinjewadi and the Magarpatta campus anchor the IT and SaaS product crowd; the Kharadi belt around EON IT Park and the Viman Nagar corridor have become the natural home for newer venture-backed teams; Baner-Balewadi runs as a younger, founder-dense tech strip; and Chakan/MIDC adds an engineering and manufacturing-software layer that most "startup city" pages ignore entirely. Each of these clusters fights Bengaluru and Hyderabad for the same senior engineers, which is exactly why a well-sized pool at Series A, B and C is a retention weapon before it is a compliance line.

Wherever in Pune the office sits, the company files with the Registrar of Companies, Pune (RoC Pune), which covers most of Maharashtra outside Mumbai. The Section 62(1)(b) special resolution goes out in MGT-14 within 30 days of the meeting, and any allotment on exercise is returned in PAS-3, all lodged on the MCA21 portal. We pair the cap-table modelling with the RoC Pune filing as a single engagement so a Hinjewadi or Kharadi founder is never negotiating the pool in the dark and never left holding the paperwork after the round closes.

The pattern we see most: a Hinjewadi or Magarpatta company raises Series A from a Bengaluru or Mumbai fund, the term sheet quietly asks for a 12 to 15 percent pre-money pool to fund a product-engineering build-out, and the founders only feel the shuffle after signing. We put that exact scenario on a spreadsheet, in points and in shares, while the term sheet is still open for negotiation.

All fees and charges listed are indicative only and do not constitute a binding offer. Final amounts may vary depending on the volume of work and the complexity involved.

Professional service charges for drafting, filing, and representation are separate from the statutory fees. The exact fee depends on the complexity of the case, disputed amount, and number of hearings required. Contact us for a detailed quote.

Get a free ESOP at a Funding Round consultation - Call +91 945 945 6700 or WhatsApp us. No-obligation assessment.

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Patron Accounting LLP is a CA and CS firm with 15+ years on startup equity, cap tables and ESOP compliance through funding rounds.

With offices in Pune, Mumbai, Delhi and Gurugram, Patron Accounting serves businesses across India, both in-person and remotely.

When a Hinjewadi or Baner founder reads a lead's term sheet, this single table is the one to hold it against, because it decides how many points of your own company the pool quietly costs you.

A Hinjewadi SaaS company and a Chakan engineering startup answer to exactly the same central statutes; what is local about Pune is only the registry the forms reach, namely RoC Pune, and the MGT-14 and PAS-3 lodged on MCA21. The law underneath is national.

ESOP issue: an ESOP pool and its top-ups are issued under Section 62(1)(b) of the Companies Act read with Rule 12, requiring a board resolution and a shareholder special resolution to approve the scheme and the pool size.

Valuation: the exercise price and the perquisite value on exercise are set with a merchant-banker or registered-valuer valuation, with Rule 11UA of the Income-tax Rules governing fair market value for unlisted shares.

Register: options granted are recorded in the SH-6 ESOP register, and the relevant ROC forms are filed for the resolution and any allotment on exercise.

DPIIT startups: DPIIT-recognised startups have wider ESOP eligibility, including for promoter-directors, and employees may access the Section 80-IAC-linked tax deferral on ESOP perquisite.

Authoritative sources: the Ministry of Corporate Affairs (Section 62, Rule 12), the Income Tax Department (Rule 11UA, ESOP perquisite), Startup India (DPIIT recognition), and the Companies Act and Rules.

The pool decision is made in the term sheet, and once it is signed the dilution is locked. The time to model the scenarios and negotiate the pre-money versus post-money treatment is before you sign, not after. Bring us in while the term sheet is still on the table, when a few days of modelling can protect several points of founder ownership for good.

At every funding round, the ESOP pool is both a hiring tool and a dilution event, and the pre-money versus post-money choice can quietly cost founders real ownership.

Patron Accounting LLP, a CA and CS firm with 15+ years of startup-equity experience, models your cap table, sizes the pool to your hiring plan, supports the term-sheet negotiation and runs the statutory top-up, round after round, so you fund your team without giving away more than you need to.

Start with the national ESOP At Funding Round Series A/B/C service, then explore complementary ESOP services across India.

• ESOP At Funding Round Series A/B/C in India - the national parent service
• ESOP Services Hub - the full ESOP advisory hub - route by stage, scenario or tax
• ESOP Scheme Design - design the option pool, vesting schedule and leaver terms
• ESOP Valuation Services - Rule 11UA fair-market-value reports for grants and exercises
• ESOP Corporate Filings - MGT-14, PAS-3 and Form SH-6 register filings
• ESOP Perquisite Tax (Sec 17(2)(vi)) - perquisite tax and TDS computation at exercise

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