Three points you will get to know in this article:
- Zomato allocated approximately 10.65 crore equity shares through employee stock option plans, strengthening its equity structure and rewarding its workforce.
- Zomato achieved its second consecutive profitable quarter, with a profit after tax of INR 36 Cr in Q2 FY24 and a surge in operating income.
- Zomato’s rapid commerce branch, Blinkit, achieved a positive contribution for the quarter, demonstrating growth since its acquisition. Zomato’s shares also closed on a high note, surpassing the listing price.
Zomato Allocates 10.65 Crore Equity Shares through ESOPs
The renowned foodtech giant, Zomato, has recently assigned approximately 10.65 crore equity shares through various employee stock option plans (ESOPs). In an official filing with the exchange, the company communicated that its board has given the green light for the allocation of 10,64,69,448 fully paid-up shares as part of the Zomato Employee Stock Option Plan 2018, Zomato Employee Stock Option Plan 2021, and Zomato Employee Stock Option Plan 2022.
Breakdown of Share Allocation
The majority of these shares found their home in the 2021 ESOP plan by Zomato, with a notable 30.95 lakh shares being designated under the 2018 and 2022 plans. This noteworthy development transpired just three months following the allocation of 2.52 crore shares to dedicated employees in August 2023.
Impact on Zomato’s Equity Structure and Financials
After the recent allocation of shares, Zomato is set to witness an uptick in its issued, subscribed, and paid-up equity share capital, soaring from INR 860.44 Cr to INR 871.09 Cr. This exciting development coincided with Zomato’s unveiling of its financial performance for the quarter ending September 2023. Notably, the company shared that its share-based expenses experienced a noteworthy surge, reaching INR 132 Cr in Q2 FY24, compared to INR 100 Cr in the preceding quarter. However, it’s worth mentioning that this figure did display a slight dip from the INR 137 Cr recorded in the same quarter of the previous fiscal year.
Zomato’s Commitment to Employee Rewards and ESOPs
This strategic move to allocate shares not only fortifies Zomato’s equity structure but also reflects the company’s commitment to rewarding its workforce through Employee Stock Option Plans (ESOPs). This aligns with Zomato’s ongoing efforts to strengthen its position in the ever-evolving foodtech landscape.
Emphasis on Talent Incentivization and Retention
The surge in share-based expenses underscores Zomato’s emphasis on incentivizing and retaining talent, a crucial aspect in the competitive tech industry. As the company continues to navigate the dynamic market, these financial maneuvers showcase a proactive approach in adapting to industry trends and ensuring sustainable growth.
Zomato’s Profitability Streak and Financial Performance
Meanwhile, Zomato is on a winning streak, marking its second consecutive profitable quarter with a notable profit after tax of INR 36 Cr in the second quarter of the fiscal year 2024. This achievement follows its breakthrough maiden profitable quarter in Q1 FY24, where it reported a profit after tax of INR 2 Cr. Quite a remarkable turnaround considering that in the same quarter last fiscal year, Q2 FY23, the company had faced a net loss of INR 251 Cr.
Surge in Operating Income
In a significant financial upswing, Zomato’s operating income surged to INR 2,848 Cr during the reviewed quarter, a considerable leap from the INR 1,661 Cr recorded in the corresponding quarter of the previous year. This robust financial performance underscores Zomato’s growing strength and resilience in the market. The company seems to be not just maintaining but accelerating its profitability, marking a pivotal phase in its financial narrative.
Blinkit’s Positive Contribution and Growth
The renowned foodtech leader witnessed a notable milestone as its rapid commerce branch, Blinkit, achieved a positive contribution for the entire quarter, marking a significant achievement since its acquisition in June 2022. Notably, Blinkit’s contribution margin, measured as a percentage of the gross order value (GOV) within the overall business, demonstrated a remarkable transformation, transitioning from -7.3% in Q2 FY23 to a positive +1.3% by the close of the quarter on September 30, 2023.
Zomato’s Stock Performance and Market Outlook
In the world of stocks, Zomato’s shares concluded Friday’s trading session on a high note, surging by 8.3% and reaching INR 116.40 on the Bombay Stock Exchange (BSE). This triumphant closure surpassed its listing price on the bourses, marking the first time in approximately 22 months. This positive turn of events reflects a promising upward trend for Zomato, echoing the resilience and growth potential of the company in the dynamic landscape of the foodtech industry.
Zomato, the renowned foodtech giant, recently allocated approximately 10.65 crore equity shares through various employee stock option plans. This move aims to reward and retain talent, showcasing the company’s commitment to its workforce. Alongside this development, Zomato unveiled its financial performance, marking its second consecutive profitable quarter and a surge in operating income. The company’s rapid commerce branch, Blinkit, achieved a positive contribution for the entire quarter, demonstrating significant growth since its acquisition. Zomato’s shares also closed on a high note, surpassing the listing price, indicating promising growth in the foodtech industry.
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