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ESOP Services for Listed Companies

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Framework: SEBI (Share Based Employee Benefits and Sweat Equity) Regulations 2021.

New: Regulation 9A (notified 8 September 2025) on founder ESOPs at IPO.

Scope: scheme, approvals, disclosures, PIT code, annual reporting.

Engagement: quoted and deal-dependent for listed entities.

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What This Service Covers

📌 TL;DR - Listed-Company ESOP Services at a Glance

Listed-company ESOPs are governed by the SEBI SBEB Regulations 2021, with the new Regulation 9A clarifying founder ESOPs at IPO. We handle scheme, approvals, disclosure and reporting; engagements are quoted.

Listed-company ESOPs live under the SEBI SBEB Regulations, not just the Companies Act, and the bar for compliance is high. Patron Accounting runs your listed-company ESOP end to end: scheme design, SEBI SBEB and Regulation 9A compliance, shareholder approvals, LODR disclosure and annual reporting.

For a listed company, an ESOP is a SEBI matter as much as a Companies Act one. The SBEB Regulations govern how schemes are framed, approved, disclosed and administered, and the recent Regulation 9A resolves a long-standing question on founder ESOPs at IPO. We run the whole programme for your board and secretarial team.

Content is reviewed quarterly for accuracy.

The SEBI SBEB Regulations 2021

The SEBI (Share Based Employee Benefits and Sweat Equity) Regulations 2021 are the master framework for share-based benefits at listed companies, covering ESOPs, stock appreciation rights, sweat equity and employee benefit trusts. They sit alongside the Companies Act, not instead of it.

The Regulations require a shareholder special resolution to adopt or vary a scheme, set rules for administration through a compensation committee or a trust, prescribe disclosures, and bar promoters and promoter-group members from ESOPs, subject to the new Regulation 9A carve-out. Listed companies also disclose under SEBI LODR and operate within the SEBI Prohibition of Insider Trading code.

Key Terms for Listed-Company ESOP:

SBEB Regulations 2021: the master framework for listed-company ESOPs, SARs, sweat equity and trusts.
Regulation 9A: the 2025 carve-out for founder ESOPs granted before the DRHP.
SEBI LODR: the listing disclosure regime that applies to ESOP events.
PIT code: the insider-trading code governing exercise windows.

Governed by SEBI SBEB Regulations 2021

Regulation 9A: Founder ESOPs at IPO

Regulation 9A in brief (notified 8 September 2025)

An employee later identified as a promoter or promoter-group member in the draft offer document may retain and exercise ESOPs, SARs or similar benefits, provided they were granted at least one year before the draft red herring prospectus was filed, and subject to the scheme terms and applicable law.

Why it matters: founders are often granted ESOPs as employees, then reclassified as promoters when the company files for an IPO, at which point the promoter bar would otherwise strip those benefits. Regulation 9A closes that gap with a one-year cooling-off safeguard.

The background: the amendment followed a March 2025 consultation paper and the high-profile Paytm founder case, settled in May 2025 with a surrender of about 21 million ESOPs and a three-year ban, which made the need for clarity acute. We help IPO-bound and newly listed companies apply Regulation 9A correctly to founder grants.

Our Listed-Company ESOP Services

Service	What We Do
ESOP Scheme Design and Adoption	We design the scheme, draft the special resolution and explanatory statement, and structure the compensation committee or trust route for a listed entity.
SEBI SBEB Compliance	We run end-to-end SBEB compliance: scheme rules, administration, grant and exercise mechanics, and the prescribed SEBI disclosures.
Regulation 9A Founder-ESOP Treatment	We assess and structure founder ESOPs against Regulation 9A and the one-year DRHP cooling-off rule, for IPO-bound and newly listed companies.
Annual Disclosure and Reporting	We prepare the annual ESOP disclosures, the board-report statements and the LODR filings required of a listed company.
PIT and Governance	We align ESOP administration with the SEBI Prohibition of Insider Trading code and the company's governance framework.

Our Process

How a Listed-Company ESOP Programme Runs

From SBEB-compliant scheme design to annual reporting, we run the full programme for your board and secretarial team.

Step 1

Design the scheme

We frame the ESOP to SBEB requirements, with the committee or trust structure.

SBEB rules Committee / trust

Designed 01

Step 2

Shareholder approval

We pass the special resolution adopting the scheme, with the prescribed disclosures.

Special resolution Disclosures

Approved 02

Step 3

Grant and administer

We make grants, run vesting and exercise, and apply Regulation 9A to any promoter-classified founders.

Grants + vesting Reg 9A applied

Administered 03

Step 4

Disclose under LODR

We file the required disclosures and keep the market informed as events occur.

LODR filings Event-based

Disclosed 04

Step 5

Report annually

We prepare the annual ESOP disclosures and board-report statements each year.

Annual disclosures Board report

Reported 05

The Listed-Company ESOP Sub-Cluster

This page is the master for three focused listed-company services. Use the one that matches your need, or talk to us for the full programme.

SEBI SBEB compliance: end-to-end compliance with the SBEB Regulations: scheme, administration, disclosures.
Regulation 9A founder treatment: founder ESOPs at IPO under Regulation 9A and the one-year cooling-off rule.
Annual disclosure and reporting: annual ESOP disclosures, board-report statements and LODR filings.

Common Challenges and How We Solve Them

Challenge	Impact	How Patron Accounting Solves It
Founder ESOPs at risk on promoter reclassification	Benefits stripped at IPO	Structure grants to meet the Regulation 9A one-year DRHP rule.
Scheme not SBEB-compliant	Regulatory exposure	Redraft the scheme and resolutions to the SBEB Regulations.
Missed or late LODR disclosures	Listing penalties	Run a disclosure calendar tied to scheme events.
PIT code conflicts on exercise windows	Insider-trading risk	Align ESOP exercise with the insider-trading code.

Engagement and Fees

Fee Component	Amount
Engagement model	Quoted and deal-dependent for listed entities
Scope range	From a one-off Regulation 9A assessment to a full scheme design, approval and annual-compliance programme
Priced to	Scheme size, regulatory scope and the level of ongoing support
How to start	Tell us your plan and we will scope a fixed engagement

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 Listed-Company ESOP consultation - Call +91 945 945 6700 or WhatsApp us. No-obligation assessment.

Time Taken

Stage	Estimated Timeline
New listed-company ESOP scheme, design to shareholder approval	4 to 8 weeks
Focused Regulation 9A assessment for founder grants	1 to 2 weeks
Annual disclosure and reporting	On the company's reporting cycle

The scheme timeline is driven by the general-meeting notice and the disclosure work. A focused Regulation 9A assessment is faster, and annual reporting runs on your reporting cycle.

Key Benefits

Why Use a Specialist

Fully SBEB-compliant

A scheme that is fully SEBI SBEB-compliant, not just Companies Act-compliant.

Founder ESOPs survive

Founder ESOPs structured to survive promoter reclassification under Regulation 9A.

Disclosures on time

LODR disclosures and annual reporting done correctly and on time.

PIT-aligned

ESOP administration aligned with the SEBI insider-trading code.

Trusted by Listed Companies and Boards

10,000+ Businesses | 4.9 Google Rating | 50,000+ Documents Processed | 15+ Years

Patron Accounting LLP is a CA and CS firm with 15+ years advising listed companies on SEBI compliance, secretarial work and share-based benefits.

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

Listed vs Unlisted ESOPs

Aspect	Listed Company	Unlisted Company
Framework	SEBI SBEB Regulations 2021	Companies Act, Section 62
Disclosure	LODR, market disclosures	ROC filings
Promoter ESOPs	Barred, except Regulation 9A	Barred, except DPIIT startups
Insider trading	PIT code applies	Not applicable

Related Services

Explore the listed-company programme: end-to-end ESOP management and compliance services covering SEBI SBEB compliance, Regulation 9A founder-ESOP treatment, and annual disclosure and reporting for listed entities.

Unlisted or startup ESOPs? See ESOP management and compliance services and ESOP scheme design. Listed companies also need secretarial audit, and the deadlines sit in your compliance calendar. See also the full ESOP services hub.

Legal and Regulatory Framework

SEBI SBEB Regulations 2021: the master framework for listed-company ESOPs, SARs, sweat equity and employee benefit trusts, requiring a shareholder special resolution, prescribed disclosures, and barring promoters from ESOPs subject to Regulation 9A.

Regulation 9A: inserted by the SEBI SBEB (Amendment) Regulations 2025, notified 8 September 2025, permitting an employee identified as a promoter or promoter-group member in the draft offer document to retain and exercise benefits granted at least one year before the DRHP filing.

SEBI LODR and PIT: listed companies disclose ESOP scheme and grant information under the SEBI Listing Obligations and Disclosure Requirements, and administer exercise within the SEBI Prohibition of Insider Trading code.

Companies Act: the Section 62(1)(b) ESOP route and the related registers continue to apply alongside the SEBI framework for a listed company.

Authoritative sources: the Securities and Exchange Board of India (SBEB Regulations, Regulation 9A), the Ministry of Corporate Affairs (Companies Act, Section 62), the Companies Act and Rules, and the Income Tax Department (ESOP perquisite, capital gains).

What regulations govern ESOPs for listed companies?

Listed-company ESOPs are governed primarily by the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations 2021, which cover ESOPs, stock appreciation rights, sweat equity and employee benefit trusts. These sit alongside the Companies Act and require a shareholder special resolution, prescribed disclosures, and compliance with SEBI LODR and the insider-trading code. The SBEB Regulations are the master framework for any share-based benefit at a listed company.

What is Regulation 9A of the SBEB Regulations?

Regulation 9A, inserted by the SEBI SBEB Amendment Regulations 2025 and notified on 8 September 2025, allows an employee who is later identified as a promoter or promoter-group member in the draft offer document to retain and exercise ESOPs, SARs or similar benefits. The condition is that the benefits were granted at least one year before the draft red herring prospectus was filed, subject to the scheme terms and applicable law.

Listed company mein promoter ESOP rakh sakta hai kya?

Aam taur par nahi, SBEB Regulations promoters ko ESOP se bar karte hain. Lekin Regulation 9A ke baad, agar founder ko promoter classify kiya gaya DRHP mein, aur ESOP DRHP filing se kam se kam ek saal pehle grant hua tha, to wo retain aur exercise kar sakta hai. Yeh ek saal ka cooling-off safeguard hai.

Why was Regulation 9A introduced?

Founders are often granted ESOPs as employees and then reclassified as promoters when the company files for an IPO, at which point the promoter bar would strip those benefits. Regulation 9A, following a March 2025 consultation and the high-profile Paytm founder case, resolves this by letting pre-IPO founder ESOPs survive reclassification, with a one-year cooling-off period that protects investors while preserving legitimate long-term incentives.

What disclosures does a listed company make for ESOPs?

A listed company discloses its ESOP scheme and grant details when adopting the scheme by special resolution, makes event-based disclosures to the stock exchanges under SEBI LODR, and prepares annual ESOP disclosures and board-report statements each year. Administration must also respect the SEBI Prohibition of Insider Trading code, particularly around exercise windows. Our annual disclosure and reporting service handles these filings.

How is a listed-company ESOP different from an unlisted one?

A listed-company ESOP is governed by the SEBI SBEB Regulations 2021 with LODR disclosures and the insider-trading code, on top of the Companies Act. An unlisted company follows mainly the Companies Act and Section 62, with ROC filings and no SEBI layer. Promoters are barred in both, but the carve-outs differ: Regulation 9A for listed companies at IPO, and the DPIIT-startup exemption for unlisted companies.

ESOP scheme ke liye shareholder approval chahiye kya?

Haan. Listed company mein ESOP scheme adopt ya vary karne ke liye shareholders ka special resolution chahiye, prescribed disclosures ke saath. Yeh SBEB Regulations ki requirement hai. Iske baad LODR disclosures aur annual reporting bhi karni hoti hai.

Do the SBEB Regulations cover SARs and sweat equity too?

Yes. The SEBI SBEB Regulations 2021 are a single framework covering ESOPs, stock appreciation rights, sweat equity and employee benefit trusts for listed companies. Regulation 9A itself refers to ESOPs, SARs and similar benefits. So a listed company structuring any share-based incentive, not only a classic ESOP, looks to the SBEB Regulations for the rules on approval, administration and disclosure.

Quick Answers

Framework? SEBI SBEB Regulations 2021.
New rule? Regulation 9A, 8 September 2025.
Promoter ESOP? Barred, except Regulation 9A.
Reg 9A condition? Granted 1 year before DRHP.
Approval? Shareholder special resolution.

Why Timing Matters

For IPO-bound companies, the Regulation 9A one-year rule is measured from the DRHP filing, so founder grants must be in place well before the company decides to list. Structure founder ESOPs early, and keep the scheme and disclosures SBEB-compliant throughout, so the incentives survive the move to a listed, promoter-classified world.

Run Your Listed-Company ESOP with Confidence

Listed-company ESOPs demand a SEBI-grade compliance programme, from SBEB-compliant scheme design to LODR disclosure, the insider-trading code and the new Regulation 9A treatment of founder grants.

Patron Accounting LLP, a CA and CS firm with 15+ years of listed-company compliance experience, runs the full programme and its focused spokes, scoped and quoted to your scheme.

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Listed-Company ESOP Support Across India

In-person and remote SEBI SBEB compliance, Regulation 9A treatment and annual reporting for listed companies.

We advise listed companies nationwide, with offices in Pune, Mumbai, Delhi and Gurugram and remote support across India. The SEBI SBEB compliance, Regulation 9A treatment and annual reporting is handled the same way wherever you are based.

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Content Created: 2 June 2026 | Last Updated: | Next Review: 2 September 2026 | Reviewed By: CA & CS Team, Patron Accounting LLP

This page is reviewed every three months for any further SEBI SBEB amendments, clarifications or circulars on Regulation 9A, LODR disclosure changes, PIT code updates, and SEBI consultation papers on share-based benefits (Tier 1 freshness).