Unacademy Tightens ESOP Rules For Ex-Staff, Shorter Exercise Window Sparks Criticism Amid Takeover Talks

Unacademy has reduced the ESOP exercise window for former employees from 10 years to 30 days. The change comes as the edtech firm discusses a possible acquisition at a much lower valuation, raising concerns among ex-employees about taxes, fairness, and the value of their stock options.

, and ASMedia

2025 December 24 . 7:30 AM

1 min read

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Unacademy Tightens ESOP Rules For Ex-Staff, Shorter Exercise Window Sparks Criticism Amid Takeover Talks

Unacademy has introduced a one-time 30-day window for former employees to purchase their earned stock options. The move follows a recent policy change that now requires ex-workers to exercise these options within 30 days of leaving—down from the previous 10-year period. Founder Gaurav Munjal confirmed the decision aims to support employees ahead of any potential deal affecting the company’s shares.

The edtech firm, which has raised over USD 800 million from investors such as SoftBank, Temasek, and General Atlantic, is currently in acquisition talks. Reports suggest discussions with both Upgrad and Byju’s, with a proposed valuation around Rs 2,650 crore (approximately USD 300 million). This figure is significantly lower than earlier valuations, raising concerns about the impact on employee stock options (ESOPs).

The policy shift comes after cofounders Gaurav Munjal and Roman Saini stepped back from daily operations in September. Sumit Jain now leads the company as CEO. Munjal clarified that his own ESOPs would also be subject to the new rules, framing the change as a way to give employees a fair chance to secure their shares before any transaction.

However, exercising ESOPs will trigger immediate tax liabilities for former staff, even if they have yet to profit from the shares. Additionally, the reduced acquisition valuation could activate 'liquidation preference' clauses, potentially rendering ESOPs worthless for employees.

The 30-day window offers former employees a limited opportunity to buy their stock options before any deal is finalised. Tax obligations and the risk of ESOPs losing value under the new terms add complexity to the decision. The outcome will depend on whether a sale proceeds and how investors enforce their rights.