Zomato allocates shares worth Rs 200 cr to staff at Re 1 face value
Online food delivery platform Zomato, which is going through its worst phase at Dalal Street, has allotted nearly 4.66 crore shares to its employees from its employee stock option plan (ESOP) pool at the face value of Rs 1.
The board of directors approved the allotment of 4,65,51,600 equity shares to employees upon exercise of vested stock options, according to its filing with the stock exchanges.
The entire allotment is worth around Rs 200 crore (Zomaro's share price was hovering around Rs 43 on Wednesday).
"We wish to inform you that the nomination and remuneration committee of the board of directors of the company at its meeting held on July 25, 2022, has approved the allotment of 4,65,51,600 equity shares having a face value of INR 1 each, as fully paid-up, to identified employees of the company and its subsidiaries upon exercise of vested options," the company said in its note.
The food delivery platform's total share allotment to the staff stands at 792.02 crore shares.
In a 2018 scheme, Zomato alloted 63.5 lakh ESOPs while in 2021, it gave 4.02 crore shares to employees.
The stock allotment came as Zomato's share price tanked over 11 per cent on Monday and more than 7 per cent to hit an all-time low of Rs 43.05 on Tuesday, wiping out more than Rs 89,000 crore.
Global brokerage and research firm Jefferies has said it is time to buy as the stock can be a good entry point for long-term investors.
In a note, Jefferies said that now is the time for long-term investors to Buy Zomato stock with a target price of Rs 100.
"Zomato management has also accelerated its journey towards better unit economics and is now eyeing a break-even in the food delivery business in the foreseeable future," the note read.
The online food delivery giant's stock has fallen more than 69 per cent this year.
Zomato shares fell to their lowest levels since the IPO was launched at Rs 76 per share as the one year lock-in period for investors considered insiders has ended.