Zomato has received shareholders' approval to create a new employee stock option pool of 18.2 crore shares, with 75 percent investors voting in favour of the move and 25 percent against it, the food and grocery delivery platform said on exchanges late on July 1.
At current market price of Rs 207.19 on the NSE, 18.2 crore shares of the company are worth over Rs 3,800 crore.
After a new ESOP plan is approved, it is typically granted to employees over a few years.
In its shareholder letter dated May 13, Zomato CEO Deepinder Goyal said that this ESOP pool should be sufficient for the next 5 years, and amounts to 2 percent of the company's outstanding share capital on a fully diluted basis.
"ESOPs are important to help build a culture of long-term thinking and innovation and create a ‘founder mindset’ amongst senior employees, which ultimately drives the right outcomes for long-term shareholder value creation. Also, in people-dependent businesses like ours, where great execution and constant innovation are the only determinants of survival, ESOPs are a great way to drive the high-performance culture that we thrive on," he said.
Zomato's stock has been trading at more than 100 times forward earnings, well above multiples for global peers including Uber, Deliveroo, and Meituan. Brokerages expect the momentum to sustain on the back of further uptick in profit for Zomato’s “quick commerce” business Blinkit.
Meanwhile, the foodtech major's ESOP cost almost doubled to Rs 161 crore in the March quarter, compared to Rs 84 crore in the year-ago period.
The company expects the charge to further increase in FY25 on account of grant of ESOPs to the Blinkit leadership team and senior employees, Zomato CFO Akshant Goyal had said.
In another news, Zomato has brought back two senior executives, who had left the company last year, and asked them to incubate new ideas for its going-out business, the vertical where Paytm’s movie ticketing and events business may eventually reside if deal talks between the two Indian unicorns fructify.
Sources confirmed that Rahul Ganjoo, who was head of new businesses when he quit, after being the chief executive officer of food delivery and head of product management, and Pradyot Ghate, who was a vice-president when he left, were back in the fold.
At 9.48 am, Zomato was trading at Rs 206.06 on the National Stock Exchange, up 1.02 percent from the previous close.
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