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Business News/ Markets / Stock Markets/  Zomato ESOPs: Food delivery platform allots 18.26 crore shares to employees
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Zomato ESOPs: Food delivery platform allots 18.26 crore shares to employees

Zomato allocates 18.26 crore shares as ESOP to employees and subsidiaries, as per BSE filing. Each share entitles one fully paid-up equity share of face value ₹1 under ESOP 2024.

29 November, 2017 Kolkata Zomato delivery boys in Park street area on 29 November, 2017 Photo by Indranil Bhoumik/mintPremium
29 November, 2017 Kolkata Zomato delivery boys in Park street area on 29 November, 2017 Photo by Indranil Bhoumik/mint

Food delivery firm Zomato has allotted employee stock option plans (ESOP) worth 18.26 crore shares to its employees of the company and its subsidiaries, it said in a BSE exchange filing on Monday.

“18,26,27,402 (Eighteen Crore Twenty Six Lakh Twenty Seven Thousand Four Hundred and Two) grants are covered by ESOP 2024, which shall entitle 1 (one) fully paid-up equity share of face value of 1/- (Rupee One) each against each ESOP exercised (will be proportionately adjusted due to corporate action(s), if any)," the company said. 

In an exchange filing, the company stated that the formulation, adoption, and implementation of an employee stock option plan, namely Zomato Employee Stock Option Plan 2024 ("ESOP 2024"), subject to the approval of the Company's shareholders, considers the grant of 18,26,27,402 employee stock options ('Options') to employees of the company, subsidiaries, and associates companies, if any.

Also Read: Zomato results: Q4 Net profit at 175 crore versus loss of 189 crore YoY; shares down 2%

Deepinder Goyal, CEO of Zomato, stated in a letter to shareholders that, subject to shareholder approval, the company proposes to create an additional ESOP pool of 2% of its existing share capital on a fully diluted basis.

According to Deepinder Goyal, ESOPs are essential for fostering a culture of long-term thinking and creativity, as well as developing a 'founder mindset' among senior staff, which eventually leads to the optimal outcomes for long-term shareholder value development. Furthermore, in people-dependent firms like theirs, where superb execution and ongoing innovation are the only predictors of survival, ESOPs are an excellent way to fuel the high-performance culture that they value.

“We will continue to follow our earlier format of ESOPs with face value as the strike price; vesting will be linked to time and performance conditions (details of which will follow in the postal ballot notice for shareholders’ approval). This new ESOP pool should be sufficient for us for at least the next five years. We look forward to getting support from our shareholders here," added Goyal.

Also Read: Zomato Q4 results today: Expect net profit to rise 58% to 218 crore, revenue growth seen at 6% QoQ

The company posted a consolidated net profit of 175 crore in Q4 FY24 versus a loss of 189 crore same period a year ago. The consolidated revenue from operations was 3,562 crore. It was 2,056 crore a year earlier, it added. The total expenses were 3,636 crore. According to the company, the total expenses for the same time last year were 2,431 crore.

The consolidated net profit for the fiscal year that ended March 31, 2024 was 351 crore. The previous fiscal year, which concluded on March 31, 2023, saw the company rpeort a consolidated net loss of 971 crore. 

According to Deepinder Goyal, the total ESOP cost for Q4FY24 was 161 crore, compared to 122 crore in Q3FY24. The business expects the ESOP fee to rise further in FY25 due to the granting of ESOPs to the Blinkit executive team and senior employees.

“Also, just to be clear, the creation of the new ESOP pool mentioned above by itself will not lead to any increase in ESOP charge. ESOP charge is a non-cash expense and is booked only when the ESOPs are granted to employees," added Goyal.

On Monday, Zomato share price closed 3.82% down, at 193.70 apiece on BSE. 

Also Read: Zomato Q3 Results: Net profit at 138 crore, revenue up 69% YoY; 5 key highlights

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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Published: 13 May 2024, 03:51 PM IST
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