Zomato seeks shareholder approval for ESOP plan of 18.2 cr shares worth over Rs 3,500 cr

Deepinder Goyal, CEO, Zomato

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26 Aug, 2025 12:21

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Zomato has sought shareholder approval for a fresh employee stock option plan (ESOP) of 18.2 crore shares of the company that are cumulatively worth over Rs 3,500 crore at current market value.

After a new ESOP plan is approved, it is typically granted to employees over a few years. In its shareholder letter, Zomato CEO Deepinder Goyal said that this ESOP pool should be sufficient for the next 5 years, and amounts to 2%
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.

This comes even as the company’s stock has been on an upsurge, rising 62 percent to Rs 198 apiece in the past 6 months, on the back of rising profitability in its core business and the fast growth of its quick commerce arm, Blinkit.

High ESOP costs have been a thorny issue for new-age companies like Zomato and Paytm for the past few years.

Zomato’s ESOP cost almost doubled to Rs 161 crore in the March quarter, compared to Rs 84 crore in the year-ago period.

"We expect the ESOP charge to increase further in FY25 on account of grant of ESOPs to the Blinkit leadership team and senior employees," said Zomato CFO Akshant Goyal.

"At an overall level, our total employee expense (including cash expense and non-cash ESOP charge) as a % of Adjusted Revenue has reduced from 29% in FY22 to 12% in FY24, and despite the expected increase in both the ESOP charge and the cash employee expense, we expect this ratio to continue trending downwards in FY25 and beyond," he added.

The company's stock is trading at more than 100 times forward earnings, well above multiples for global peers including Uber, Deliveroo, and Meituan.

Goldman Sachs Group Inc. expects profit forecasts to increase for Zomato’s “quick commerce” business Blinkit, analyst Manish Adukia wrote in a recent note. While “earlier investor conversations suggested skepticism around profitability of this business model,” concerns should ease as more results are reported, he said.

The rich valuations for Zomato looked justified given “significantly higher” projected revenue and profits for the company, according to ICICI Securities Ltd. analyst Abhisek Banerjee. The broker adds that the stock has basically moved in line with Doordash Inc. over the past six months amid improving sentiment on tech stocks around the world.