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Tag: employee stock option plans

  • 10.58 Lakh Shares Are Allotted by ixigo Under ESOP Plans

    Under many employee stock option plan (ESOP) strategies, online travel aggregator (OTA) ixigo has distributed 10.58 lakh equity shares to qualified employees. The travel tech startup stated in a filing with the markets that the shares were offered at a premium of INR 0.25 per share and an exercise price of INR 1.25 per share.

    The company announced that 10,58,143 fully paid-up equity shares with a face value of INR 1/- each have been allotted to the option holders under the Le Travenues Technology – Employee Stock Option Scheme 2013,…, ESOS 2016,…, 2020,…, 2021…, according to the company’s statement. The board of directors of the company has approved the allocation. Since the allocation, the travel tech platform’s entire paid-up share capital has increased from INR 38.87 Cr to INR 38.97 Cr.

    Step is Taken to Encourage and Retain

    ixigo added that the purpose of the ESOPs was to “motivate and retain” bright workers and give them “additional deferred rewards.” This comes after the business distributed over 4.6 lakh equity shares under different ESOP plans in December 2024. Before this, in November, the OTA granted 17.57 lakh more stock options under the ESOP 2024 scheme, increasing the size of its ESOP pool.

    Financial Outlook of ixigo

    The announcement coincided with the OTA’s financial results for the third quarter (Q3) of the fiscal year 2024–2025 (FY25). Ixigo’s consolidated net profit fell by half to INR 15.54 Cr in the quarter under review from INR 30.65 Cr in Q3 FY24 due to increased tax charges. In the meantime, operating revenue increased 42% to INR 241.76 Cr in Q3 FY25 from INR 170.55 Cr in Q3 FY24.  In terms of operations, Ixigo’s gross transaction volume (GTV) increased by 48% from INR 2,718.3 Cr in Q3 FY24 to INR 4,036.3 Cr during the quarter.

    According to a 2024 survey of 160 companies, 78% of them offered employee stock option plans (ESOPs) to their staff, a considerable increase from 59% in 2021. This indicates that ESOPs are becoming more and more popular among startup owners. More firms are now offering ESOPs to all employees, not only senior management, according to a survey done by Saison Capital, XA Network, and Carta. Compared to one in four in 2021, one in three firms now provides these plans to all employees.

    Furthermore, the median ESOP pool size grew from 9% in 2021 to 12.6% in 2024, and 90% of founders now talk about ESOPs with candidates during interviews or job offers, up from 75% in 2021. Additionally, the reasons for providing ESOPs have changed; in 2024, 40% of founders cited cost reductions, up from 28% in 2021.

    The founders cited the necessity to retain people as the second most important reason for putting these plans into action, behind creating a sense of ownership and company culture. Even with this increase, fewer than 30% of founders still fully understand the complexity of ESOPs, a percentage that hasn’t changed since 2021.

    Zomato Expands ESOP Pool with 4.17 Crore Stock Options
    Zomato increases its ESOP pool by adding 4.17 crore stock options, aiming to enhance employee benefits and retain top talent in the competitive market.
    StartupTalkyNitin Konde

  • 2.61 Cr Equity Shares Are Allotted by Swiggy Under ESOP Plans

    2.61 Cr equity shares have been distributed by listed foodtech giant Swiggy through its different employee stock option (ESOP) plans. Swiggy announced in an exchange filing on January 25 that the nominating and compensation committee had authorised the distribution of 2,61,93,411 equity shares of the firm in response to qualified workers exercising their stock options under the Swiggy ESOP Plans 2015 and 2021. Swiggy’s paid-up equity share capital rose from INR 2.23 Cr to INR 2.26 Cr after this allocation. The newly allotted shares are worth INR 1175.69 Cr, with Swiggy’s shares closing 2.7% lower on the BSE at INR 448.85 each on the last trading session of January 25.

    Swiggy’s ESOPs  

    Swiggy launched its sixth employee stock option plan (ESOP) liquidity program last year, valued at $65 million (about INR 543.5 crore), prior to its offering. In June 2018, Swiggy introduced the first ESOP program. In 2021, it then announced two ESOP liquidity programs valued between $35 and $40 million. In 2022 and 2023, the two tranches under this were finished. Recently, the firm managed by Sriharsha Majety released a new app called “SNACC,” which aims to provide a 15-minute food delivery service in specific areas of Bengaluru. Zomato then introduced Bistro, a 10-minute meal delivery service.

    According to a 2024 survey of 160 companies, 78% of them offered employee stock option plans (ESOPs) to their staff, a considerable increase from 59% in 2021. This indicates that ESOPs are becoming more and more popular among startup owners. More firms are now offering ESOPs to all employees, not only senior management, according to a survey done by Saison Capital, XA Network, and Carta. Compared to one in four in 2021, one in three firms now provides these plans to all employees.

    Furthermore, the median ESOP pool size grew from 9% in 2021 to 12.6% in 2024, and 90% of founders now talk about ESOPs with candidates during interviews or job offers, up from 75% in 2021. Additionally, the reasons for providing ESOPs have changed; in 2024, 40% of founders cited cost reductions, up from 28% in 2021.

    The founders cited the necessity to retain people as the second most important reason for putting these plans into action, behind creating a sense of ownership and company culture. Even with this increase, fewer than 30% of founders still fully understand the complexity of ESOPs, a percentage that hasn’t changed since 2021.

    Zomato Expands ESOP Pool with 4.17 Crore Stock Options
    Zomato increases its ESOP pool by adding 4.17 crore stock options, aiming to enhance employee benefits and retain top talent in the competitive market.
    StartupTalkyNitin Konde

  • Zomato Adds 4.17 Cr Stock Option to its ESOP Pool

    With the distribution of approximately 1.2 Cr in stock options to qualified employees, foodtech giant Zomato has increased the size of its employee stock option plan (ESOP) pool. The company, managed by Deepinder Goyal, announced in an exchange statement on October 2 that its board has approved the issuance of 1,19,97,768 stock options under various ESOP schemes. 116 stock options under the Foodie Bay ESOP 2014 plan and 1.19 Cr stock options under the Zomato ESOP 2021 scheme have been given by the meal delivery and fast commerce behemoth. Under its ESOP schemes, each stock option is convertible into a single fully paid-up equity share with a face value of INR 1 each. These options can be exercised within 10 years of the options’ vesting date or 12 years of Zomato’s public listing date, whichever comes first. According to the filing, lock-in will not apply to the equity shares that will be distributed following the exercise of the stock options. According to the stock’s most recent opening price, the freshly allotted shares are worth a total of INR 328.91 Cr.

    The Move to Retain Top Executives and Allure Fresh Talent

    Zomato has floated new ESOPs many times this year in an effort to draw in talent from international startups and to retain top executives. Zomato distributed about 35.17 lakh stock shares in August. The foodtech giant had previously announced that it had won approval from shareholders to adopt and execute Zomato ESOP 2024, a new employee stock option plan that would award 18.26 Cr in stock options to employees. The changes coincide with Zomato’s steady increase in profit margins due to the company’s robust business growth, especially in its rapid commerce vertical, Blinkit. While Zomato’s operating revenue increased 74% year over year (YoY) to INR 4,206 Cr in Q1 FY25, the company’s consolidated net profit increased multifold year over year (YoY) to INR 253 Cr. By concentrating on going-out business, the company hopes to further stabilise its revenue.

    Adding New Feature for Further Expansion

    In addition to launching the “Book Now, Sell Anytime” functionality for tickets purchased for any live event on the Zomato app, Zomato has also acquired Paytm’s movie and events ticketing businesses. Additionally, Zomato has been dropping unsuccessful products and introducing new features to attract users. In order to facilitate the control of food expenses for corporations and their registered personnel, Zomato recently launched “Zomato for Enterprise” (ZFE). But the foodtech major’s tax problems are getting worse. The company was hit with a new goods and services tax (GST) demand and penalty order for more than INR 17.70 crore by West Bengal GST officials last month. Authorities in West Bengal and Tamil Nadu fined Zomato INR 4.59 Cr in August for GST violations.

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    StartupTalkyNitin Konde

  • Under ESOP, Nykaa Allots 1.80 Lakh Equity Shares

    Nykaa, a leading e-commerce company in the beauty and fashion industry, has granted its employees 1.80 lakh equity shares through the Employee Stock Option Plan (ESOP). This follows the startup’s announcement of a 66.3% increase in its consolidated net profit from INR 7.8 Cr to INR 12.97 Cr in the second quarter of FY25. As stated in a filing, “The equity shares so allotted shall rank pari-passu with the existing equity shares of the Company in all respects.”

     It hasn’t, however, revealed the shift in its paid-up capital.  It is relevant to mention that Nykaa incurred employee benefit expenses totalling INR 161.49 Cr in Q2 FY25. Compared to INR 136.32 Cr spent the previous year, this amount represents an 18.5% increase. The broking firm JM Financial has kept its “buy” recommendation for the e-commerce behemoth at INR 250 following the release of its financial results.

    Nykaa Scaling Financial Growth

    The broking firm claims that the startup has achieved growth despite a “unfavourable demand environment.” Nevertheless, broking firm Bernstein kept the startup’s “market-perform” rating, pointing to an 8.6% drop in the EBIDTA margin. It established INR 165 as the goal price. In the September quarter of FY25, Nykaa‘s operating revenue increased 24.4% to INR 1,874.74 Cr from INR 1,746.11 Cr in the second quarter of FY24. Revenue grew 7.2% on a quarter-over-quarter (QoQ) basis from INR 1,753.44 Cr.

    BPC Segment Continues to be Highest Revenue Generator

    The fashion vertical continues to trail behind, despite the beauty and personal care (BPC) segment showcasing a 24.3% YoY gain in revenue to INR 1,702.89 Cr. In Q2 FY25, however, this segment reported a 21.7% YoY increase in revenue to INR 166.10 Cr. The startup’s total costs increased by 7.3% QoQ and 23.7% YoY to INR 1,858.93 Cr. The company’s biggest expenditures were on marketing, personnel benefits, and the acquisition of traded goods.

    ESOP is Gaining Popularity Among Indian Startups

    According to a 2024 survey of 160 companies, 78% of them offered employee stock option plans (ESOPs) to their staff, a considerable increase from 59% in 2021. This indicates that ESOPs are becoming more and more popular among startup owners. More firms are now offering ESOPs to all employees, not only senior management, according to a survey done by Saison Capital, XA Network, and Carta. Compared to one in four in 2021, one in three firms now provide these plans to all employees.

    Furthermore, the median ESOP pool size grew from 9% in 2021 to 12.6% in 2024, and 90% of founders now talk about ESOPs with candidates during interviews or job offers, up from 75% in 2021. Additionally, the reasons for providing ESOPs have changed; in 2024, 40% of founders cited cost reductions, up from 28% in 2021. The founders cited the necessity to retain people as the second most important reason for putting these plans into action, behind creating a sense of ownership and company culture.

    Even with this increase, fewer than 30% of founders still fully understand the complexity of ESOPs, a percentage that hasn’t changed since 2021. Just 14% of founders felt educated about the tax consequences of ESOPs, which is a fairly low level of understanding.

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  • With the Expansion of the ESOP Pool, Ixigo Grants 17.57 Lakh Stock Options

    With the issuance of 17.57 lakh stock options under ESOP 2024, online travel aggregator (OTA) Ixigo has extended its employee stock option plan (ESOP). The company stated in an exchange filing that the issuance of 17,57,156 options under ESOP 2024 was authorised by its nominating and compensation committee.

    Each option will convert into an equal number of equity shares, and they will vest over a four-year period in equal annual increments of 25% each. At an exercise price of INR 93 per share, the options have been granted.

    The Reason Behind This Move

    Ixigo stated that the goal of the allocation is to retain and reward the finest talent, just like it is for issuing ESOPs. Additionally, the business stated that it wishes to provide current staff with additional pushed prizes.

    The announcement was made just days after Ixigo released its second-quarter FY25 financial results. In the September quarter of 2024, its consolidated net profit fell 51% to INR 13.08 Cr from INR 26.70 Cr in the same quarter the previous year. On a sequential basis, profit decreased from INR 14.85 Cr by 12%.  The main cause of the earnings drop was an increase in total tax costs, which in Q2 FY25 was INR 5.26 Cr.

    Acquiring 51% Stake in Zoop Web Services

    In addition to its financial results, the firm disclosed that it had paid INR 12.54 Cr ($1.4 Mn) for a 51% investment in train food delivery startup Zoop Web Services, which was acquired through a combination of primary and secondary share transactions.

    Several public startups have announced the issuance of stock options under ESOP programmes in recent months. IdeaForge, a drone business, gave its staff more than 2,600 stock options earlier. The supply chain giant Delhivery also gave its workers roughly 73,000 stock options earlier this month.

    Current ESOP Scenario in India

    According to a 2024 survey of 160 companies, 78% of them offered employee stock option plans (ESOPs) to their staff, a considerable increase from 59% in 2021. This indicates that ESOPs are becoming more and more popular among startup owners. More firms are now offering ESOPs to all employees, not only senior management, according to a survey done by Saison Capital, XA Network, and Carta. Compared to one in four in 2021, one in three firms now provides these plans to all employees.

     Furthermore, the median ESOP pool size grew from 9% in 2021 to 12.6% in 2024, and 90% of founders now talk about ESOPs with candidates during interviews or job offers, up from 75% in 2021. Additionally, the reasons for providing ESOPs have changed; in 2024, 40% of founders cited cost reductions, up from 28% in 2021.

    The founders cited the necessity to retain people as the second most important reason for putting these plans into action, behind creating a sense of ownership and company culture. Even with this increase, fewer than 30% of founders still fully understand the complexity of ESOPs, a percentage that hasn’t changed since 2021.

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  • Swiggy is Prohibited by a B’luru Court from Alienating a Terminated Executive’s ESOP

    Until the next hearing, the court barred Swiggy from alienating 24 of a former executive’s exercised stock options and 185.454 vested and unexercised stock options. Arun Cyril, Swiggy’s former assistant vice president, contested his “illegal” dismissal from the foodtech firm and the ESOPs that followed. Swiggy’s initial public offering (IPO) ended on 8 November 2024, with the public offering being oversubscribed 3.59 times on the last day.

    For the time being, until the next hearing, a Bengaluru civil court has barred foodtech giant Swiggy from alienating or “creating any charge” on more than 200 stock options owned by a former executive who was fired by the business earlier this year. According to the court’s order dated November 7, defendant No. 1 company (Swiggy) and its directors are prohibited from establishing any charges, interests, or alienating 185.454 vested and unexercised stock options and 24 exercised stock options of the plaintiff until the next hearing date. The next hearing in the case is scheduled for November 23 by the court.

    What Lead to Court’s Intervention?

    Arun Cyril, the former assistant vice president of Swiggy’s contact centre operations, petitioned for the directives earlier this year. 

    Cyril, who spent over ten years working at the foodtech major from 2015 to 2024, contested his “illegal” layoff and the company’s subsequent cancellation of his employee stock option plans (ESOPs) in the plea. Swiggy and its rival Zomato were found guilty of violating antitrust regulations and giving preference to specific restaurant chains listed on their platforms, according to a report by a media house earlier today.

    In addition, on November 6, the Delhi High Court sent notice to Swiggy and the Competition Commission of India (CCI) regarding a plea submitted by the National Restaurant Association of India (NRAI), contesting the exclusion of the trade association from a confidentiality ring established by the watchdog to investigate purportedly anti-competitive actions by Zomato and Swiggy.

    Swiggy’s IPO

    Among all of these, Swiggy’s initial public offering (IPO) closed recently, with the deal oversubscribed by 3.59X on the last day. In contrast to the 16.01 Cr shares available, the IPO got bids for 57.53 Cr shares, with qualified institutional investors (QIBs) accounting for the majority of these bids.  The IPO consists of an offer for sale (OFS) of 17.5 crore shares and a new issue of shares valued at INR 4,499 crore. For the public offering, Swiggy has specified a price range of INR 371 to INR 390 per share. On November 5, before the issue was made available for public subscription, Swiggy obtained INR 5,085 Cr from anchor investors. On November 13, its shares are now scheduled to go public.

    Swiggy’s first quarter (Q1) of the fiscal year 2024–25 (FY25) saw a combined net loss of INR 611 Cr, up more than 8% year over year (YoY). During the reviewed quarter, operating revenue increased 35% year over year to INR 3,222.2 Cr. 

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