Can’t speak for the Indian markets, but in American and Chinese equities the examples are dime a dozen. ESOP is not the issue, but they still dilute the shareholders, what you need for the ESOP to be really viable are buybacks, that way not only the shareholders but also the employees who have become shareholders will be incentivized in the long run as the value of their shares grow. Tencent is one good example, massive buybacks. AZO, NVR, ORLY are some good US examples, bought back more than 50% of the company in some cases, total cannibals.
As long as the ESOPs are not excessively dilutive, they shouldn’t be a concern. 0.5% is not much imo and there are companies that dilute twice that even after accounting for buybacks.
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