In a bold and altruistic move, Zomato CEO and MD Deepinder Goyal has extended his voluntary salary waiver, opting not to draw his annual remuneration of ₹3.5 crore until the end of the financial year 2026 (FY26). This decision, disclosed in the company’s Qualified Institutional Placement (QIP) documents, marks an extension of his previous commitment, where he had already waived his salary for 36 months ending in FY24.
Goyal, while forgoing his fixed salary, remains entitled to a variable pay component that will be determined by the board of directors at a later stage.
A Selfless Leadership Decision
The latest announcement underscores Goyal’s dedication to Zomato’s growth and financial health. His initial waiver in 2021 covered FY21 to FY24, but with this extension, he will not take any fixed remuneration until March 31, 2026.
“Through letters dated March 24, 2021, and April 1, 2024, Deepinder Goyal has voluntarily waived his salary for a period starting from April 1, 2021, till March 31, 2026,” the offer document revealed.
Despite the waiver, Goyal continues to fulfill his roles and responsibilities as the company’s CEO and MD, ensuring Zomato remains on its growth trajectory in a competitive market.
While Goyal has opted not to draw a salary, his financial interests in Zomato remain substantial. He holds a **4.18% stake in the company**, which translates to a valuation exceeding ₹10,000 crore based on Zomato’s current market performance.
Zomato’s stock has witnessed a phenomenal rally, rising over 140% year-to-date (YTD) and trading at ₹277.35 per share as of November 26, 2024. This surge highlights growing investor confidence in Zomato’s strategic initiatives and market position.
Zomato’s Market Strength
Zomato’s strong financial performance has positioned it as a formidable player in the food delivery and quick commerce industries. As of November 26, Zomato boasts a **market capitalization of ₹2,45,243 crore ($28.8 billion)**, far outpacing its competitors. Swiggy, which recently went public, has a market capitalization of ₹99,845 crore ($11.8 billion).
The surge in Zomato’s stock was further fueled by two significant developments:
1. Inclusion in the 30-stock Sensex, making it the first new-age company to achieve this milestone.
2. Approval for a ₹8,500 crore ($1 billion) QIP, aimed at bolstering the company’s financial position.
Strategic Fundraising and Allocation
Zomato’s QIP will allow the company to raise $1 billion, setting a floor price of ₹265.91 per share with potential discounts of up to 5% to attract institutional investors. Once completed, Zomato’s cash reserves will swell to approximately ₹19,300 crore ($2.3 billion).
The funds raised through the QIP are earmarked for several strategic purposes:
– Dark Stores and Warehousing: ₹2,137 crore will be used to set up and operate facilities to support its quick commerce arm, Blinkit.
– Marketing and Branding: ₹2,492 crore is allocated to enhance Zomato’s brand presence across its business offerings.
– Technology and Infrastructure: ₹1,769 crore will go toward improving Zomato’s tech and operational capabilities.
– General Corporate Purposes: The remaining funds will support various corporate initiatives.
The QIP funds come at a time when the food delivery and quick commerce industries are becoming increasingly competitive. Rivals like Zepto and Swiggy have been aggressively scaling their operations.
– Zepto raised $1.35 billion in funding earlier this year and is focusing on rapid expansion through dark stores.
– Swiggy, which recently debuted on the public market, is also intensifying its efforts to capture market share.
Zomato’s decision to channel significant resources into Blinkit signals its intent to maintain its leadership in quick commerce. Blinkit has emerged as the market leader in the space, ahead of Zepto and Swiggy.
CEO Goyal’s Vision for the Future
Deepinder Goyal’s salary waiver and Zomato’s aggressive fundraising are indicative of the company’s long-term vision. By prioritizing resource allocation for expansion and innovation, Zomato aims to consolidate its leadership position in the food delivery and quick commerce sectors.
Goyal’s decision to forgo his salary reflects a commitment to Zomato’s mission and a strong belief in its future potential. This leadership move has undoubtedly inspired confidence among stakeholders as the company navigates a competitive and fast-evolving market.
Zomato’s trajectory under Deepinder Goyal’s leadership showcases a blend of strategic foresight and operational agility. The CEO’s voluntary salary waiver is a testament to his dedication to the company’s growth and long-term success.
With a robust fundraising plan in place, Zomato is well-equipped to tackle rising competition, expand its quick commerce operations, and strengthen its brand. As the company continues to innovate and evolve, it is poised to solidify its position as a dominant player in the global food delivery and quick commerce industries.
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