Zomato, the listed fintech giant, has announced a significant expansion of its employee stock option plan (ESOP), granting a total of 4.17 crore stock options to eligible employees under its ESOP plans.
This development was disclosed in an exchange filing dated January 22, 2025.
In the filing, Zomato stated, “The Nomination and Remuneration Committee of the Company (“NRC”) on January 22, 2025, has approved a total grant of 41,756,590 stock options under the Foodie Bay Employee Stock Option Plan 2014 (“ESOP 2014”), Zomato Employee Stock Option Plan 2021 (“ESOP 2021”), and Zomato Employee Stock Option Plan 2024 (“ESOP 2024”) to eligible employees.”
Breakdown of the Grants
Of the total 4.17 crore stock options, the majority has been allocated under ESOP 2024, which accounts for 3.7 crore options.
The remaining grants include 41.21 lakh options under ESOP 2021 and 1,952 options under ESOP 2014.
Each stock option can be converted into one fully paid-up equity share with a face value of INR 1. In total, 5.48 crore equity shares with a face value of INR 1 are covered under the granted stock options.
Based on Zomato’s stock closing price of INR 221.90 per share on January 23, 2025, the total value of these stock options is estimated at INR 926.57 crore.
Vesting and Exercise Terms
The stock options under ESOP 2014 and ESOP 2021 can be exercised within ten years from the date of vesting or 12 years from the date of listing, whichever is later.
For ESOP 2024, the exercise period is within ten years from the date of vesting.
Retention and Talent Acquisition Strategy
The company stated that the ESOPs are a critical component of its strategy to retain top executives and attract global talent.
This expansion follows several key developments in Zomato’s ESOP initiatives in recent months.
In December 2024, the company allotted 47.75 crore equity shares under various ESOPs to the Foodie Bay Employees ESOP Trust.
Earlier in October, Zomato had expanded its ESOP pool by allotting nearly 1.2 crore stock options to eligible employees.
Financial Context
The move comes at a time when Zomato is grappling with declining profitability.
The company reported a 57.2% drop in its consolidated net profit for Q3 FY25, standing at INR 59 crore compared to INR 138 crore in the same quarter last year.
Sequentially, profits fell 66% from INR 176 crore in Q2 FY25.
