Online food delivery aggregator Zomato, on Wednesday said it has allotted 4.65 crore equity shares worth $20.5 million, under its two employee stock option plans (Esops). The move comes after the company's stock suffered a near 20% loss in the first 2 sessions this week.
Under its Zomato Employee Stock Option Plan 2018, Zomato alloted 6.35 million shares and under its Zomato Employee Stock Option Plan 2021, it alloted 4.02 crore shares, said Zomato in a stock market disclosure.
Post the allotment of the shares, Zomato's issued, subscribed, and paid-up equity share capital of the company will increase from around Rs 787.5 crore to a little over Rs 792 crore.
The equity share allotment under its Esops comes at a time when Zomato shares have faced severe pressure after the end of the stock’s lock-in period ended on July 23. The aggregator’s share price has corrected nearly 70% from its peak hit shortly after a blockbuster listing last year
However, stocks of not just Zomato but other tech startups that got listed last year have also taken a beating amid concerns about their valuations. Zomato's acquisition announcement of quick commerce firm Blinkit has also raised worries about its path to profitability.
However, on Wednesday there was some respite to Zomato as its shares ended higher at Rs 43.95 per share, up 5.52%.
On Tuesday, global brokerage firm Jefferies said that Zomato makes for a great case for long-term investors and set a 12-month target price of its shares at Rs 100 a piece. Jefferies also said that Zomato management has accelerated its journey towards better unit economics and is now eyeing a break-even in the food delivery business in the foreseeable future.
Zomato reported a net loss of Rs 359.7 crore for the quarter-ended March versus a loss of Rs 138.1 crore during the same period in the preceding year. The net loss widened despite a rise in other income to Rs 138.2 cr versus Rs 58.4 crore.
Zomato’s revenue, however, saw a 75% rise in Q4FY22, at Rs 1,211.8 crore vs Rs 692.4 crore year-on-year. The company will report its first quarter (April-June) earnings on August 1.
Deepinder Goyal, Zomato’s co-founder and chief executive officer, in May said he is donating entire proceeds worth Rs 700 crore ($90 million) received after vesting some of his Esops to Zomato Future Foundation (ZFF).
Goyal was granted some Esops before Zomato went public last year and some of the Esop were vested in April. There’s a minimum one-year vesting required as per law.