Zomato Shares Hit A Fresh All-Time High After Foodtech Major Allots 4.07 Cr ESOPs

Zomato Slapped With Over INR 4 Cr GST Demand, Penalty Orders

SUMMARY

Shares of Zomato reached an all-time high of INR 223.40 apiece during Friday’s intraday trading session

The surge in the stock’s price came a day after Zomato said it has allotted more than 4.07 Cr employee stock options to its employees

Zomato clocked a 26% sequential growth in its consolidated net profit to INR 175 Cr in Q4 FY24 as against INR 138 Cr in the preceding quarter

Update | July 12, 17:30 PM

Shares of Zomato reached a fresh all-time high at INR 223.40 during the intraday trading on Friday.

However, the stock shed some gains and closed today’s trading session at INR 222.45 apiece, up 2.42% from the previous close.

Original Story | July 12, 13:31 PM

Shares of Zomato hit a fresh all-time high of INR 221.30 apiece during the intraday trading on Friday (July 12) after the foodtech major announced the allotment of more than 4.07 Cr stock options to its employees.

The stock opened today at INR 218.60 per share, marking a 0.6% increase from the previous close.

However, after touching a record high, the stock pared some gains and was trading 1.08% higher at INR 219.55 apiece on the BSE at 1:25 PM.

The stock has jumped nearly 21% in the last month and zoomed over 180% in the last year.

The surge in the stock’s price came a day after Zomato said it has allotted 123 equity shares under the Foodie Bay Employee Stock Option Plan 2014 (ESOP 2014) and 4,07,39,330 equity shares under the Zomato Employee Stock Option Plan 2021 (ESOP 2021).

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“We wish to inform that the Nomination and Remuneration Committee of the Company (“NRC”) by way of circular resolution today, on July 11, 2024 has approved a total grant of 40,739,453 stock options under Foodie Bay Employee Stock Option Plan 2014 (“ESOP 2014”), Zomato Employee Stock Option Plan 2021 (“ESOP 2021”) to the eligible employees,” it said in a exchange filing.

As per the stock’s opening price today, the newly-allotted ESOPs are worth nearly INR 890.5 Cr.

The development comes days after Zomato said it has secured approval from its shareholders to formulate, adopt and implement a new employee stock option plan, Zomato ESOP 2024, to grant 18.26 Cr employee stock options.

With the latest ESOP allotment disclosure, Zomato has joined the likes of Delhivery, Nykaa, Paytm, PB Fintech and ideaForge that have announced ESOPs this year.

It is pertinent to note that Zomato posted a 26% quarter-on-quarter jump in its consolidated net profit to INR 175 Cr in Q4 FY24 from INR 138 Cr in the preceding quarter.

Despite the overall positive sentiment around the stock, JM Financial earlier this week cut its price target to INR 230 from INR 250 previously, as per Inc42’s report.

The brokerage said that ESOP grants should be linked to measurable performance-based outcomes, which is not the case with Zomato’s newly laid-out policy.

JM Financial analysts further said that some shareholders could deem the ESOPs as unfair as it could take a toll on their earnings.

Meanwhile, Kotak Institutional Equities has retained its buy rating on the stock at a fair value of INR 225 per share.