A client holds Rs 15 crore of her Rs 18 crore net worth in her employer's shares, a stock with 45% volatility. Compare her portfolio volatility and the chance of a 50% wealth loss before and after diversifying, and lay out a staged three-year selling plan.

Today her wealth swings with about 38% volatility and carries a chance of about 11% of halving within three years; with Rs 2 crore of Zenvora left, volatility falls to about 13% and that chance to well under 1 in 1,000. Sell Rs 13 crore over three years, Rs 6, 4 and 3 crore, front-loaded, inside the company's trading windows or a pre-disclosed trading plan. The tax on the gains is far smaller than one bad year in the stock.

A household that lives on one salary, keeps its savings with that same employer and lives in the company town is not diversified however many accounts it has. Farah's salary, her future grants and 83% of her wealth all depend on Zenvora, so one bad event hits her income and her savings together. On the numbers alone, the portfolio's volatility is about 38.3%, nearly the stock's own 45%, because the Rs 3 crore of balanced funds is too small to offset it.

Model wealth as lognormal and ask how often it ends below Rs 9 crore after three years. Concentrated, the answer is about 10.8%, roughly one chance in nine; diversified, about 0.003%, effectively nil. The model flatters the concentrated case. A single company can lose most of its value on one event, a failed product, an accounting problem or a regulatory ruling, far more often than a normal curve allows, while a diversified portfolio has no such single point of failure.

Selling everything at once removes the risk fastest, and that is the benchmark against which any delay must justify itself. Staging is justified by constraints, not by a view on the stock: insider trading windows, tax spread across financial years, and a client who will only follow a plan she accepts. As a senior employee she is likely a designated person who can trade only in open windows with pre-clearance; Indian insider trading rules also allow a trading plan disclosed in advance, so confirm the current conditions with the company's compliance officer. Front-load the plan, because the risk is largest now: Rs 6 crore in year one, Rs 4 crore in year two and Rs 3 crore in year three, each year split into tranches across the open windows.

Frame tax as a cost to compare, not a reason to wait. About 80% of every rupee she sells is gain, so the Rs 13 crore sale realises about Rs 10.4 crore of gains. Every point of tax rate costs about Rs 104.0 lakh; even at an illustrative 20%, chosen to be cautious and not the current rate, the bill is about Rs 2.1 crore, against Rs 6.75 crore lost in one bad year of a 45% volatility stock. Whether gains are long or short term, and the cost basis of shares acquired through options, depend on rules to confirm with her tax adviser at current rates. The policy statement then records the target: Zenvora at no more than about 10% to 15% of net worth by the end of year three, the selling schedule, a rule to sell faster if the stock rises sharply, and a rule that new grants are sold as they vest.