In an effort to attract and retain top people, Zomato, one of India’s top foodtech companies, has announced a significant expansion of its employee stock option plans (ESOPs). 4.17 crore stock options were awarded by the business under its ESOP 2014, ESOP 2021, and ESOP 2024 plans. The announcement and its ramifications are broken down here.
Credits: Inc 42
Breaking Down the Stock Option Grant
According to Zomato’s exchange filing, the Nomination and Remuneration Committee (NRC) approved the grant on January 22, 2025. A total of 41,756,590 stock options were allocated across three ESOP plans:
ESOP 2024: The largest portion, 3.7 crore options, was granted under the latest ESOP 2024 plan.
ESOP 2021: 41.21 lakh options were granted under this plan.
ESOP 2014: 1,952 options were allocated under the oldest plan.
These stock options, once vested, allow eligible employees to purchase Zomato’s shares at a predetermined price, fostering long-term loyalty and rewarding their contributions.
Vesting and Exercise Periods
Zomato’s filing also highlighted the vesting and exercise periods for these options:
ESOP 2014 and 2021: Options under these plans can be exercised within 10 years from the date of vesting or 12 years from Zomato’s stock market listing, whichever is later.
ESOP 2024: The exercise period is within 10 years from the date of vesting.
In total, 5.48 crore equity shares, each with a face value of INR 1, are covered under the granted stock options. Upon conversion, these options will translate into fully paid-up equity shares with a face value of INR 1 each.
A Financial Snapshot of the Grant
The financial scale of this ESOP grant is substantial. Based on Zomato’s stock closing price of INR 216.45 on January 22, 2025, the total value of the granted options is estimated at a staggering ₹903.82 crore. This move not only underscores Zomato’s commitment to employee satisfaction but also highlights the company’s growth trajectory.
Why ESOPs Matter in Today’s Corporate Landscape
Plans for employee stock options have grown to be an effective tool for businesses looking to draw in and keep top personnel. ESOPs link employee performance to organizational development by giving workers a share in the company’s success. Zomato’s commitment on rewarding staff members who foster innovation and commercial success is reflected in its decision to increase the scope of its ESOP offers.
In the highly competitive tech sector, where qualified workers are in great demand worldwide, this step is especially crucial. Zomato has an advantage in luring elite personnel, not only in India but globally, by providing significant ESOPs.
The Bigger Picture: Zomato’s Growth and Market Presence
Zomato has been on a growth spree in recent years. From strengthening its food delivery operations to diversifying into adjacent sectors, the company continues to make strategic moves to solidify its market presence. The generous ESOP grants align with Zomato’s broader strategy of fostering a high-performance culture.
Additionally, Zomato’s stock has shown resilience and growth in the market. Its closing price of INR 216.45 per share reflects investor confidence, further emphasizing the value of the granted ESOPs.
What This Means for Zomato’s Employees
For Zomato’s employees, this ESOP expansion represents more than just financial incentives. It signifies the company’s commitment to recognizing their contributions. Employees now have a chance to benefit directly from Zomato’s market success, creating a sense of ownership and loyalty.
The substantial valuation of the granted ESOPs also ensures that Zomato’s top executives and talented professionals feel valued and motivated to contribute to the company’s ambitious goals.
Credits: Money Control
Conclusion: A Step Towards Sustained Success
An important turning point in Zomato’s history has been reached with its decision to award 4.17 crore stock options valued at ₹903.82 crore. By using ESOPs, the business not only improves its strategy for retaining talent but also establishes itself as a top employer in the cutthroat IT sector. Zomato is still at the forefront of the Indian foodtech industry thanks to its unwavering focus on expansion, innovation, and worker satisfaction.
Comments are closed.