Mahindra & Mahindra (M&M) is set to roll out a one-time Employee Stock Ownership Plan (ESOP) for approximately 23,000 employees, with an estimated financial outlay of ₹400-500 crore. This initiative is particularly noteworthy as it extends to shop floor workers, marking a significant shift in wealth-sharing practices within Indian conglomerates.

The ESOP grant spans across three core entities within the Mahindra Group: Mahindra & Mahindra (Auto and Farm Sector), Mahindra Electric Automobile, and Mahindra Last Mile Mobility. Employees who have been on the permanent payroll for at least one year are eligible for the grant, which will be issued in the form of Restricted Stock Units (RSUs).

Group CEO & MD of Mahindra Group, Anish Shah, emphasized that the ESOPs are a token of gratitude for employees' contributions to the company's growth. He stated that the aim is to make employees "co-owners" of the enterprise rather than just contributors, aligning their efforts with the company's long-term value creation. Shah also highlighted that the group's market capitalization has grown twelvefold since April 2020, underscoring the importance of acknowledging the workforce's role in this achievement.

Traditionally, ESOPs have been reserved for senior executives and managerial staff. Mahindra's decision to include shop floor workers represents a departure from this norm and sets a precedent for broader-based wealth sharing in Indian industry. Industry experts have praised the move for its potential to reshape employee engagement and improve productivity. According to Rajiv Agarwal, Chair of Strategy at SPJIMR, the initiative could encourage workers to take a more active role in the company's growth.

A notable feature of the ESOP plan is its accessibility to lower-income employees. Those whose income falls below the taxable threshold are exempt from paying tax on the grant, including any gains they receive from their stock units. This provision is particularly relevant for shop floor workers, many of whom fall within this bracket.

This announcement follows a period of strong financial performance for Mahindra, with its stock witnessing a twelvefold increase over the past five years. This growth has been fueled by the success of popular models such as the Thar SUV. Mahindra has also recently overtaken Hyundai to become India's second-largest passenger vehicle manufacturer, underscoring its growing market influence. In July 2025, the company recorded a 26% year-on-year rise in vehicle sales, reaching 83,691 units. Sales in the utility vehicle category grew by 20%, supported by new launches. In the tractor segment, Mahindra sold 26,990 units domestically, a 5% increase over the previous year.

The ESOP initiative is timed ahead of Diwali, reflecting the company's intent to recognize long-term contributions and foster a sense of ownership among its workforce.