Zomato Incurs INR 143 Crore Cost in H2 FY23 Due to Deepinder Goyal’s ESOPs

• ByStartupStory     |    May 24, 2023

In a recent related party transaction filing with the Bombay Stock Exchange (BSE), it was revealed that Zomato founder Deepinder Goyal received a substantial benefit of INR 142.6 crore from the vesting of his employee stock options (ESOPs) during the second half of the financial year 2022-23 (H2 FY23). Previous filings indicate that Goyal has consistently gained significant ESOP benefits, including INR 216.3 crore in the first half of FY23, INR 386.9 crore in the second half of FY22, and INR 365.7 crore in the first half of FY22, as reported by Zomato.

Since the beginning of the financial year 2022-23, Deepinder Goyal, the founder of Zomato, has incurred ESOP costs amounting to INR 1,111.5 crore for the company. Notably, in the latest half-year ending on March 31, 2023, both Deepinder Goyal and Akshant Goyal, Zomato’s CFO, voluntarily waived their salaries. Additionally, Deepinder Goyal had previously announced his intention to donate INR 700 crore in ESOP proceeds to the Zomato Future Foundation (ZFF), which aims to support the welfare of delivery partners and their children. He emphasized his commitment to protecting shareholders’ interests by not immediately liquidating all the shares received.

In response to an analyst query regarding ESOP costs, Zomato’s CFO Akshant Goyal stated in the company’s shareholders letter that the ESOP charge for FY23 amounted to INR 510 crore, a decrease from the previous fiscal year’s INR 880 billion. He further mentioned that based on current estimates, Zomato anticipates its ESOP costs to be below INR 450 crore in FY24.

Deepinder Goyal’s ESOP costs have become a focal point as Zomato strives for profitability and seeks to convince public investors of its financial stability. In the quarter ending on March 31, 2023, the foodtech company achieved adjusted EBITDA positivity, excluding its quick commerce vertical Blinkit. Zomato successfully reduced its net loss by 48% YoY to INR 187.6 crore, while experiencing a significant 70% YoY surge in operating revenue, reaching INR 2,056 crore.

“Our business excluding quick commerce turned adjusted EBITDA positive in Q4 FY23 driven by the food delivery business generating INR 0.78 billion (INR 78 Cr) of adjusted EBITDA in the quarter,” Zomato said in a statement.

In FY23, Zomato recorded a net loss of INR 971 Crore compared to INR 1,222.5 Crore in FY22. The operating revenue of the foodtech giant increased to INR 7,079.4 Crore in the fiscal year, up from INR 4,192.4 Crore in FY22.

Follow Startup Story