Zomato chief executive officer Deepinder Goyal has voluntarily waived off his annual remuneration of Rs 3.5 crore till the end of financial year 2026 (FY26), an extension of two additional years from what he had previously decided, the company’s qualified institutional placement (QIP) documents showed.
At the beginning of FY21, Goyal had said he would forgo his salary for a period of 36 months till the end of FY24. However, the latest decision essentially means he will not draw any salary till March 31, 2026. “Vide letters dated March 24, 2021 and April 1, 2024, addressed to our board, Deepinder Goyal has voluntarily waived his salary for a period starting from April 1, 2021 till March 31, 2026,” the offer document read.
Goyal will, however, continue to discharge his roles and duties as MD and CEO of Zomato during the period. He is also entitled to variable pay, the total amount of which will be decided by the board at a later date.
To be sure, Goyal holds 4.18 percent stake in Zomato, which translates to over Rs 10,000 crore as of the end of trading session on November 25 on BSE. The value of his shares has surged thanks to the rise in Zomato’s stock, which is up over 140 percent on a year-to-date (YTD) basis, trading at Rs 277.35 per share as of 1 p.m. on November 26 on BSE.
Zomato currently has a market capitalisation of Rs 2,45,243 crore or around $28.8 billion, as of 1 pm on November 26. Its recently-listed rival Swiggy has a market capitalisation of Rs 99,845 crore or about $11.8 billion.
Shares zoom QIP
Shares of food aggregator Zomato surged as much as 6 percent in opening trade on November 25, driven by two key positives: its inclusion in the 30-stock Sensex, a first for a new-age company, and approval for its Rs 8,500 crore ($1 billion) Qualified Institutional Placement (QIP).
Zomato has set a floor price of Rs 265.91 per share for the QIP, a discount of about 4 percent from its recent trade. The company may even offer a discount of about 5 percent on the floor price, based on final consultation with bankers, it had said in the exchange filings.
The Gurugram-based company has received shareholders’ approval to raise $1 billion to ward off rising competition from Zepto and Swiggy. Morgan Stanley is the banker to the issue, as first reported by Moneycontrol. While Zepto has raised $1.35 billion in about five months this year, Swiggy made its public debut in a $1.35 billion IPO earlier in the month.
Once Zomato completes its fundraise, it will have a cash chest of around Rs 19,300 crore or $2.3 billion at a time when rivals, especially Zepto, is going aggressive to capture market share by opening more dark stores and increasing its cash burn, as reported first by Moneycontrol.
While Zomato had earlier said funds raised via the QIP will be used to strengthen its balance sheet, the company now plans to spend on marketing and expanding Blinkit, its quick commerce arm which is currently the market leader ahead of Zepto and Swiggy, at a time when the industry is heating up.
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Of the Rs 8,500 crore ($1 billion) that Zomato will raise via its QIP, Rs 2,137 crore (or around $250 million) will be allocated for "expenditure towards setting up and running operations of dark stores and warehouses." Additionally, Rs 2,492 crore will be spent on "advertising, marketing, and branding initiatives across business offerings."
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Zomato will spend Rs 1,769 crore on tech and infrastructure capabilities and the remaining will be set aside for general corporate purposes, the offer document said.
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