Zomato Abandons NBFC Ambitions, Focuses on ESOP Expansion

Food delivery giant Zomato has decided to withdraw its plans to venture into the lending and credit sector, as disclosed in a recent exchange filing. The company’s finance arm, Zomato Financial Services Limited, has voluntarily pulled back its application with the Reserve Bank of India for registration as a Non-Banking Financial Company (NBFC).

“There is no material impact on the revenue/operations of the company,” stated Zomato in its official statement.

Initially announced in January 2022, Zomato’s foray into the NBFC space aimed to establish a subsidiary geared towards offering working capital loans to its network of restaurants and delivery partners. Despite early steps, including the incorporation of Zomato Financial Services Limited, the company cited strategic reasons for discontinuing its pursuit in financial services.

In a related move, Zomato Payments Private Limited also surrendered its authorization to operate as an online payment aggregator earlier this year, citing fierce competition and commercial viability concerns in the payments sector.

Alongside these decisions, Zomato has secured board approval for a significant expansion of its Employee Stock Option Plan (ESOP). The plan, encompassing 18.26 crore employee stock options, reflects the company’s commitment to aligning employee incentives with its long-term growth objectives.

“We are pleased to have garnered majority approval for our ESOP expansion plan,” said a spokesperson from Zomato in a regulatory filing. The move underscores Zomato’s efforts to bolster its workforce engagement amid a dynamic market environment.

These developments come amidst ongoing industry shifts, with competitors like Zepto focusing on rapid commerce and Swiggy navigating pre-IPO challenges. Zomato’s recalibration underscores its strategic agility in adapting to evolving market dynamics while reaffirming its commitment to shareholder value and operational efficiency.

The company’s shares closed 2.23% higher following the announcements, reflecting investor confidence in Zomato’s strategic clarity and operational focus.