Mumbai, June 7: iGate Global Solutions, the computer services company headed by Phaneesh Murthy, today announced the grant of stock options to its employees at a discount to the market price of shares. This heralds the return of an old trend that helped make millionaires of employees working for knowledge-based companies.

About 700,000 subsidised stock options will be granted to approximately 300-350 senior employees of the company at a discounted price of Rs 100 with a four-year vesting period.

“This special stock option grants are in addition to the regular stock options of the company, which is open to all employees based on performance and grade,” iGate said. The company has already secured its shareholders’ approval to the issue.

“We need to ensure that our senior employees are committed to the growth of the company and a sense of ownership is essential for ensuring this commitment,” CEO Phaneesh Murthy said.

The iGate shares today closed at Rs 228.15, up marginally from Monday’s close. That would mean that if shares were vested today, the employees could gain by over 128.15 per cent.

“We also want our people to participate in the process of creating wealth for our shareholders,” Murthy added.

Phaneesh, who made his mark in Infosys Technologies and is known in the industry as a whiz kid, had left the computer software major in controversial circumstances after a colleague accused him of sexual harassment. He, however, has made a remarkable success of his new venture and has reined in a few key Infosys personnel to join him in his new enterprise.

For middle-rung companies like iGate the problem is to retain staff and the latest move could help them in a big to stay back in the company. So far the big three, namely TCS, Infosys and Wipro, haven’t announced a similar scheme of subsidising stock options.

A back of the envelope calculation throws up a cost of upwards of Rs 7 crore for the company. This implies that the profits for iGate will be that much less.

Analysts tracking the sector, say the iGate move could be a prelude to other infotech companies following suit with similar plans.

Recently, Infosys founders and a few employees encashed nearly Rs 1,500 crore by selling their shares which they had acquired during the height of the stock options boom.

iGate revenues for 2004-05 stood at Rs 580 crore, up from Rs 570 crore for the previous fiscal. Net profits were recorded at Rs 21.2 crore against Rs 0.08 crore in the year-ago period.