State-owned Bharat Petroleum Corp Ltd (BPCL) has offered its employees stock options at one-third of the market price as the company looks to reward staff ahead of its privatisation.

The board of BPCL on Friday “approved the proposed Employee Stock Purchase Scheme (ESPS) to the specified employees through the trust mechanism, subject to the approval of the shareholders”, the company said in a regulatory filing.

While BPCL did not give details, a source with direct knowledge of the development said ‘BPCL Trust for Investment in Shares’ holds around 9.33 per cent stake of the company’s paid-up share capital.

Of this, 2 per cent will be offered to employees at one-third the price of BPCL scrip in the preceding six months, he said.

There will be no change in the government’s shareholding in the company.

The government is selling all of its 52.98 per cent stake in the company to a strategic investor. Expression of Interest (EoI) for the privatisation is due on September 30.

“The Trust formed for the purpose shall purchase the aforesaid shares from the ‘BPCL Trust for Investment in Shares’ by way of secondary acquisition through the stock exchanges as per the SEBI (Share Based Employee Benefits) Regulations, 2014 and other applicable laws,” the company said in the regulatory filing.

The source said the number of shares to be offered under the ESPS will depend on the grade of the employee and even directors on the company board would be eligible for the offer.

There will be a one-year lock-in period for the shares that employees buy under ESPS, he added.

BPCL, he said, has not yet decided on what to do with the residual 7.33 per cent stake held by the Trust.

‘BPCL Trust for Investment in Shares’ is an independent entity, of which the company is a beneficiary.

ESPS will be executed in strict compliance of the SEBI norms, the person said adding BPCL will seek shareholders’ approval for the scheme at its upcoming annual general meeting (AGM) later this month.

After shareholders approve, the company will make a former offer to employees.

BPCL closed at Rs 403.40 per share on the BSE on Friday.

Last month, it offered a voluntary retirement scheme (VRS) to some of its employees as part of the planned privatisation.

About 1,200 employees are likely to be given VRS, the source said.

BPCL stake sale is crucial to meeting the government’s record Rs 2.1 lakh crore divestment target for the current fiscal.