Amid Aggressive Profitability Targets, Zomato Allots INR 2.52 Cr ESOPs

Foodtech major Zomato is allotting 2.52 Cr shares as employee stock option plans (ESOPs) to select employees of the company and its subsidiaries.

“… the nomination and remuneration committee of the board of directors of the Company at its meeting held on today i.e., July 31, 2023, has approved the allotment of 2,52,59,179 (Two Crore Fifty Two Lakh Fifty Nine Thousand One Hundred and Seventy Nine) equity shares having a face value of INR 1 (Indian Rupee One only) each, as fully paid-up, to identified employees of the Company and its subsidiaries upon exercise of vested options,” Zomato said in an exchange filing.

The ESOPs have been vested under Zomato Employee Stock Option Plan 2018 and Zomato Employee Stock Option Plan 2021. 

Following the allotment, the issued, subscribed, and paid-up equity share capital of Zomato increased to INR 860.4 Cr from INR 857.9 Cr.

Shares of Zomato were trading on the higher side on Tuesday (August 1). The shares were up 0.7% at INR 84.7 on the BSE by 1 PM IST.

Around the same time last year, Zomato had allotted 4.65 Cr ESOPs of INR 1 face value each under its stock option plans 2018 and 2021.

In May this year, Zomato’s exchange filing revealed that founder Deepinder Goyal alone cost the startup INR 1,111.5 Cr in FY22 and FY23 combined due to the vesting of his ESOPs.

The latest ESOP allocation comes at a time when the foodtech giant is trying to achieve overall profitability and reduce expenses.

Zomato turned adjusted EBITDA positive in Q4 FY23. Its net loss narrowed by 48% year-on-year (YoY) to INR 187.6 Cr in the quarter. Its net loss stood at INR 971 Cr in FY23 as against INR 1,222.5 Cr in FY22.

The food delivery major is eyeing net profitability by Q2 FY25.

Zomato is scheduled to report its Q1 FY24 results on Thursday (August 3).

Meanwhile, Paytm, one of the biggest peers of Zomato among the new-age tech stocks, also announced allotting an additional 1.7 Mn ESOPs last month. However, this cost continues to slow the fintech giant’s path to profitability.

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