Zomato has approved issuing over 12 million employee stock options (ESOPs) as part of its pay and incentive plan. The move revealed in an exchange filing on Wednesday, October 2, 2024, is intended to reward qualified staff and motivate them to contribute to the company’s sustained success in India’s competitive food delivery sector.
Zomato has allocated a total of 11,997,768 shares under its ESOP programs. The ESOP 2021 plan includes 11,997,652 options, whereas the ESOP 2014 plan, also known as the Foodie Bay Employee Stock Option Plan, has only 116 possibilities.
Zomato’s shares closed at ₹275.20 on the Bombay Stock Exchange (BSE) on Friday, valuing the ESOPs at over ₹330.17 crore.The options have a face value of ₹1 and can be exercised within 10 years of the vesting date or 12 years of the company’s listing date, whichever comes later. There is no lock-in period, so employees can convert their options into equity shares.
The ESOP award comes amid increased competition in the online meal delivery market. Swiggy, situated in Bengaluru, is considering an original Public Offering (IPO) with an original price of ₹3,750 crore, which has been subsequently increased to ₹5,000 crore. Zomato and Swiggy have formed a near-duopoly in India’s meal delivery market.
Zomato’s employee stock options are considered as a tactic for retaining talent and improving performance as the company seeks market leadership. The awards are part of a bigger effort, with previous ESOPs awarding over 60 million stock options earlier this year in July and August.
Zomato’s Share Performance
On Friday, October 4, 2024, Zomato Ltd shares closed at ₹275.20, up 2.38% after gaining 6.40 points in the previous trading session. The exchange filing for the ESOPs was made on October 2, when the markets were closed for Gandhi Jayanti. Zomato shares closed at ₹269 on Thursday, down 1.88% from the previous day.