Deepinder Goyal ESOPs Cost Zomato INR 143 Cr In H2 FY23

SUMMARY

Put together, Goyal has set Zomato back by INR 1,111.5 Cr in ESOPs since the start of FY22 across four remunerations

Deepinder Goyal and Akshant Goyal, the company’s CFO, waived off their salaries for the half year ended March 31, 2023

The CFO added that in FY24, Zomato expects its ESOP costs to be under INR 450 Cr, having incurred INR 510 Cr in ESOP costs in FY23

Zomato founder Deepinder Goyal cost the foodtech startup INR 142.6 Cr during the second half of the financial year 2022-23 (H2 FY23) as a result of the vesting of his employee stock options (ESOPs), per a related party transaction filing last week with the Bombay Stock Exchange (BSE).

According to earlier filings, the Zomato founder has bagged hefty ESOP benefits from his stock grants over the past few months. Per Zomato’s filings, Goyal bagged INR 216.3 Cr in ESOPs in the first half of FY23, INR 386.9 Cr in the second half of FY22 and INR 365.7 Cr in the first half of FY22.

Put together, Goyal has set Zomato back by INR 1,111.5 Cr in ESOP costs since the start of FY22.

Incidentally, Deepinder Goyal and Akshant Goyal, the company’s CFO, waived off their salaries for the half year ended March 31, 2023.

In May, the foodtech’s founder announced that he will donate INR 700 Cr in ESOP proceeds received to Zomato Future Foundation (ZFF), to benefit delivery partners and their children. He had said that he does not want to liquidate all these shares immediately to protect the interests of the shareholders.

On an analyst query on the ESOP costs in the foodtech’s shareholders letter, Zomato CFO Akshant Goyal said that the FY23 ESOP charge was INR 510 Cr as compared to INR 880 Bn in FY22. The CFO added that in FY24, Zomato expects its ESOP costs to be under INR 450 Cr based on current estimates.

The ESOPs costs for Deepinder Goyal come at a time when Zomato is pushing for profitability and trying to convince public investors of the same.

However, the foodtech turned adjusted EBITDA positive excluding its quick commerce vertical Blinkit in the quarter ended March 31, 2023. Zomato managed to cut its net loss by 48% year-on-year (YoY) to INR 187.6 Cr, while its operating revenue jumped 70% YoY to INR 2,056 Cr.

“Our business excluding quick commerce turned adjusted EBITDA positive in Q4 FY23 driven by the food delivery business generating INR 0.78 billion (INR 78 Cr) of adjusted EBITDA in the quarter,” Zomato said in a statement.

For the financial year overall, Zomato posted a net loss of INR 971 Cr in FY23 as against INR 1,222.5 Cr in FY22. The foodtech’s operating revenue grew to INR 7,079.4 Cr in the year from INR 4,192.4 Cr in FY22.