ESOPs & Sweat Equity Valuation Services


    • Report on Valuation of ESOPs for Ind-AS 102,
    • Sweat Equity valuation Report for Ind-AS 102
    • ESOP Valuation for unlisted entities
    • Sweat Equity Valuation for perquisites under Income-tax
    • Valuation of ESOPs for ESOP Pool creation
    • Closed 200+ Valuation on ESOPs all over India
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ESOPs or Employee Stock Option Plans are the most imperative type of compensation for the key employees of the organization. From a start-up’s point of view, it keeps up liquidity, and from an employee's viewpoint; it is a reward for faithfulness towards the organization.

ESOPs Compensation is nowadays a popular tool for compensation and retention by a lot of Startups and Indian as well as Multi-National Companies.

Especia assists in ESOP valuation for unlisted entities, valuation of sweat equity shares & services in Noida, Delhi, Gurgaon, NCR & All over India by estimating the value of the options for regulatory, compliance & tax purposes for the employer as well as employees.

Usefulness of ESOP

For employees:

  • Since the Equity shares refer to the Ownership in the company, employees can become part of the company’s success over a period of time.

  • As per these plans, generally, shares are given at a pre-determined price, hence the employees can stand benefitted by selling the shares at a future point of time.
  • These schemes carry great motivation for employees to perform and grow with the company.
  • Employees pay zero tax on the contributions to the Esop.

For the company:

  • Leverage employees’ morale urging them to perform better in their day-to-day tasks.
  • Boosts employee retention and thereby lowers the turnover rate.
  • Savings on director remuneration for a private limited company as a part of salary by offering a certain portion of ESOPs.

Regulatory Requirement for Valuation of ESOPs & Valuation of sweat equity shares in India

Ind AS 102: Ind AS (Indian Accounting Standard) 102 prescribes financial reporting in respect of share-based benefits and is relevant for companies that remunerate their employees by share-based (or stock option) schemes, such as employee stock options (ESOP), Valuation of ESOPs, share appreciation rights (SAR), phantom equity, share purchase plans (SPP), etc.

Income tax provisions: As per Income Tax Provisions, ESOPs in India have been made taxable in the hands of employees as ‘Perquisites’, subject to certain conditions. For the purposes of clause (vi) of sub-section (2) of section 17, the fair market value of any specified security or sweat equity share, being an equity share in a company, on the date on which the option is exercised by the employee, shall be determined merchant banker (if shares are not listed) by doing Valuation of ESOPs.

Simple 3 steps involved in your valuation of ESOPs / Valuation of sweat equity shares in India

  1. Sharing of Preliminary Checklist based on the Client’s requirement.
  2. Preparation of Draft ESOP valuation report for review.
  3. Discussions and Submission of Final ESOP valuation for unlisted entities & listed as well & reporting.

You can check complete ESOP Services here such as ESOP Scheme preparation & ESOP Taxation services if you are looking for end-to-end ESOP Consultants, not just only Valuation of ESOPs.

If you have any other questions on ESOP Valuation for unlisted companies or sweat equity valuation in India, you can write to us at

A trust fund is first established for an ESOP. Companies may deposit freshly issued shares here, borrow funds to acquire shares, or finance the trust with cash to buy shares. According to the length of their work, employees might accrue an increasing number of shares over time.

Sweat Equity Shares are equity shares that are issued to a director or employee at a discount or in exchange for anything other than cash, such as know-how, the availability of intellectual property rights, or the contribution of value.

In contrast to Sweat Equity, which is given as a reward to employees who perform above and above expectations, ESOPs, also known as Employee Stock Ownership Plans, are employee benefit plans that are provided by businesses when they wish to retain personnel.

Divide the investor's contribution amount by the proportion of equity it represents to determine the exact quantity of sweat equity you require. This estimate is $500,000 divided by 20%, which is $2.5 million. Since the investor has a share of $500,000, your interest is worth $2,000,000.

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