Listed Unicorn Delhivery’s Institutional Shareholders Say No To Its ESOP Schemes

Gurugram-based logistics unicorn Delhivery’s institutional stakeholders have largely voted against its employee stock ownership plan (ESOP) schemes. 

According to the Business Standard report, Delhivery had presented nine items including ESOP 2012, Delhivery ESOP II 2020, Delhivery ESOP III 2020 and Delhivery ESOP IV 2021, Article of Associations and other allied schemes for voting in front of its stakeholders. 

By doing so, the logistics unicorn was essentially adhering to the SEBI’s norms that do not permit listed companies to make any fresh grant involving transferring shares to its employees, unless its Pre-IPO ESOP schemes are approved by shareholders. 

Interestingly, almost 72% of Delhivery’s institutional shareholders voted against the above-cited ESOP schemes in the company meeting, as per the Institutional Investor Advisory Services data.

Regardless of institutional shareholders’ disapproval, the listed logistics giant still managed to pass these resolutions with the help of non-public institutions and promoters who voted for these schemes in the company meeting. 

The latest development comes after Delhivery reported an increase in its consolidated losses by 143% to INR 1,011 Cr in the financial year 2021-22. Meanwhile, its revenue from operations plummeted high by 89% to INR 6,882.2 Cr whilst its total expenses widened by 91% to INR 8,064.5 Cr in the corresponding period. 

As of today (19th July), Delhivery’s shares are trading high by 1.51% to INR 601.60 against its previous close at INR 592.65. 

In recent times, a slew of startups have either introduced ESOP schemes or granted ESOP buyback to employees or made changes into their existing ESOP schemes. 

Earlier this month, foodtech startup iD Fresh Food granted ESOPs worth INR 46 Cr to 27 employees. With this, the startup has granted over INR 300 Cr worth ESOPs to employees to date. 

In June, gaming unicorn Mobile Premier League made a series of changes into its ESOP scheme along with its employee pay package structure so as to retain existing employees as well as attract talent. 

As per the new changes, the gaming startup would reward teams rather than employees for attaining targets. Also, it has trimmed its ESOP vesting period for employees to a few months. 

In May, fintech unicorn Oxyzo introduced an ESOP pool (ESOP 2022) worth about INR 380 Cr for its employees that are working in India as well as abroad. 

According to an Inc42 analysis, from January to May this year, Indian startups have granted over $159 Mn via their ESOP programs to employees. 

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