As part of its incentive and compensation programme, Zomato has approved the issuance of close to 12,000,000 employee stock options. This move, announced on October 2, 2024 in a stock exchange filing, is aimed at rewarding eligible employees for their contributions to Zomato’s growth and encouraging them to continue doing so in the highly competitive Indian food delivery market. Zomato has allotted a total of 11,997,768 shares to its ESOP plan. 11,997,652 of these options are under the 2020 ESOP plan, while 116 are part of the 2014 ESOP. Together, this is known as the Foodie Bay Employee Stock Option Plan. Zomato shares closed at Rs275.20 on the Bombay Stock Exchange on Friday. The ESOPs were valued at around Rs330.17 crore. Each option has a face value of Rs1 that is exercisable in 10 years from the vesting date. There is no lock-up period for the options, allowing employees to convert them into equity shares. The grant of the ESOPs comes amid heightened competition in the online delivery space. Bengaluru-based rival Swiggy, a food delivery service, has been preparing an Initial Public Offering, initially valued at Rs3,750 billion but recently approved for a raise to Rs5,000 billion. Zomato and Swiggy have a near-duopoly in India’s food delivery industry. Zomato’s employee stock options are seen by many as a way to retain talent and improve performance in the face of competition for market leadership. The grant is part of a strategy that has been underway for some time, with previous ESOPs granting more than 60 million options earlier this year.
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