Employee Ownership: Zomato Set To Allot 12 Million Shares

According to regulatory filings, food delivery giant Zomato said on Friday that it had authorised the granting of 12 million stock options to qualified staff members. Under the Foodie Bay ESOP 2014 program, the company has issued 116 stock options, and under the Zomato ESOP 2021 scheme, it has granted 11.9 million stock options. 

The newly given ESOPs are valued close to Rs 327 crore, as Zomato shares finished at Rs 274.65 apiece on the NSE on Friday, up 2 per cent from the previous session. These stock options have a face value of one rupee each and are convertible into one fully paid-up equity share. According to the petition, there would be no lock-in on the granted equity shares.

Allotted stock options may be exercised within 10 years of the date the options vest or twelve years of the listing date, whichever comes first.
Zomato granted about 3.5 million employee stock options, or shares valued around Rs 81 crore, prior to its Q1FY25 earnings. The company had already gotten approval from shareholders to establish a new employee stock option pool consisting of 182 million shares, valued at more than Rs 3,800 crore. 

The company’s ESOP charges was at 31% of the overall employee cost in FY24 at Rs 515 crore, which is lower compared to Rs 878 crore in FY22.

“ESOPs are a critical lever to drive ownership in our organisation — particularly in businesses like ours, which are in early stages of market development across all of our verticals,” CEO Deepinder Goyal had said in a Q1 shareholder letter.