Zomato allots 4.66 crore shares to employees at 98% discount
- ByStartupStory | July 28, 2022
Food delivery gaint Zomato has distributed 4.66 crore shares from its ESOP (employee stock option plan) allocation to its employees for Rs 1 despite its shares shedding 21% in value in the previous two days. At current share prices, the allocation is valued about 200 crores. Zomato stock is presently trading at 42.95.
The business’s nominating & compensation panel of its board of directors approved the distribution of approximately 4,65,51,600 equity shares to workers following the exercise of vested stock options, the company stated in a regulatory statement on July 26.
Market experts have warned that perhaps the company’s value may continue to fall this week. This warning comes as the one-year lock-in term for 78% of Zomato’s stock – around 613 crore shares – expires on July 23.
Zomato’s shares dropped more than 14% to a record low at the end of the one-year lock-in period. Following its much-anticipated stock market debut, the company’s valuation has dropped by more than 60%. Zomato’s first public offering, which took place on July 23, 2021, was a spectacular success, as it was subscribed 38.25 times, with a premium of 53%.
On November 16, 2021, the Zomato stock achieved a record level of 169.10 per share. However, its value has dropped dramatically in recent weeks.
Meanwhile, Zomato CEO Deepinder Goyal said in a recent internal communication that he will contribute over 700 crores of his ESOP income to the Zomato Future Foundation in FY22. The monies would be used to pay for the children’s education of the delivery partners.
Zomato’s Board of Directors has authorized a bid to buy Blinkit, formerly known as Grofers, for Rs 4,447 crore. However, reports indicate that investors are uneasy about the takeover of Blinkit.
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