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As new age companies race to profitability, Zomato brings down ESOP expenses quickest

Money ControlMoney Control · 1y ago
As new age companies race to profitability, Zomato brings down ESOP expenses quickest
Medial

Listed new-age companies like Zomato and Policybazaar have significantly reduced their employee stock option (ESOP) expenses in the first half of FY24 as they strive for profitability. Zomato leads the pack with a 44% decrease in ESOP costs, while other companies like Policybazaar and Delhivery have also made notable reductions. However, Paytm's ESOP costs have risen by 4% during this period. These companies have faced criticism for their large ESOP grants to top executives before IPOs, impacting their profitability. Despite the reduction in ESOP expenses, Zomato's overall employee benefits spending has marginally increased. Paytm remains the biggest spender in terms of ESOPs.

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Profitability: The new benchmark for startups seeking investor approval

LivemintLivemint · 1y ago
Profitability: The new benchmark for startups seeking investor approval
Medial

Investors are now demanding that startups demonstrate a clear path to profitability or product-market fit at an early stage. This shift in sentiment comes as many late-stage startups and unicorns that recently went public are starting to show profits. Companies like Zomato and Policy Bazaar, which have reported profits, have seen their share prices rally. This new expectation for profitability is also filtering down to unlisted companies, leading more startups to focus on achieving profitability before seeking further investment. There has been a significant overhaul in go-to-market strategies and a focus on improving unit economics and efficiency. Ultimately, investors are looking for sustainable growth and profitability in order to provide higher valuations.

Robust growth ignites rally in new-age stocks, 45% gains made in 6 months

Economic TimesEconomic Times · 11m ago
Robust growth ignites rally in new-age stocks, 45% gains made in 6 months
Medial

New-age stocks have experienced a strong revival, driven by revenue growth and improved profitability. Increased investments from overseas funds and demand for recent public offerings have contributed to the rally. Analysts believe these stocks could continue to perform well if they maintain their growth momentum. The ET E-commerce Index, consisting of 13 new-age companies, has outperformed other indices, such as the Nifty Index and Nifty IT Index. Stocks like Zomato, PB Fintech, Paytm, Nykaa, and CarTrade Tech have seen significant gains in the past six months. Improved capital allocation and efficient fund usage have also played a role in their success. However, these stocks are considered high-risk investments.

Zomato joins Nifty 50 in index reshuffle

EntrackrEntrackr · 4m ago
Zomato joins Nifty 50 in index reshuffle
Medial

Zomato joins Nifty 50 in index reshuffle In December 2024, the Deepinder Goyal-led company made history as the first new-age tech company to join the Bombay Stock Exchange (BSE) Sensex 30. In a major reshuffle of the Nifty 50 index, Zomato and Jio Financial Services will replace Britannia Industries and Bharat Petroleum Corporation Limited (BPCL). This adjustment is set to take effect on March 31, 2025. The National Stock Exchange (NSE) determines such periodic rebalancing based on the average free-float market capitalization of companies over a six-month period, spanning from August 1 to January 31. This is a major milestone for new-age tech companies in India. As per a report by JM Financial, Zomato’s addition could bring in inflows of around $620 million, impacting nearly 226.6 million shares and influencing trading volumes for approximately 3.8 days. In December 2024, the Deepinder Goyal-led company made history as the first new-age tech company to join the Bombay Stock Exchange (BSE) Sensex 30, replacing JSW Steel Limited in the benchmark index of India’s top 30 companies. The Nifty Next 50 index is also set for a major reshuffle, with the inclusion of seven new stocks: Bajaj Housing, BPCL, Britannia, CG Power, Hyundai Motor India, Indian Hotels, and Zomato’s rival Swiggy. These companies will replace Adani Total Gas, BHEL, IRCTC, Jio Financial, NHPC, Union Bank, and Zomato. The Nifty Next 50 Index serves as a benchmark, representing the top 50 companies ranked between 51 and 100 based on market capitalization on the National Stock Exchange (NSE).

Zomato adds new ESOP worth $39 Mn

EntrackrEntrackr · 9m ago
Zomato adds new ESOP worth $39 Mn
Medial

Food tech major Zomato has introduced a new ESOP plan worth Rs 328 crore (approximately $39.5 million) under the Foodie Bay Employee Stock Option Plan 2014. The board at Zomato has received the board approval to grant 1,19,97,768 ESOP options under its Foodie Bay Employee Stock Option Plan 2014, its regulatory filing accessed through the National Stock Exchange shows. This development follows three months after Zomato received shareholder approval for a new ESOP plan valued at $458 million. At that point, the total value of Zomato’s ESOPs was $796 million. During the first quarter of the ongoing fiscal year, Zomato reported 4,206 crore of revenue, registering an 18.1% quarter-on-quarter growth with the profits standing at Rs 253 crore in the same period. The company is currently trading at Rs 276 crore (as of 04th Oct 2024 11.50 AM) with a total market capitalization of Rs 2,44,000 crore or $29 billion. Zomato’s arch-rival, Swiggy is also preparing for its public market debut. The Bengaluru-based company filed its draft IPO papers to raise Rs 3,500 crore via a fresh issue. Among the public companies, Policybazaar’s parent PB Fintech, Nykaa and TBO Tek also increased their ESOP pool in 2024. Meanwhile, Zomato is seeing major shifts in its leadership following the recent departure of Akriti Chopra, its co-founder and Chief People Officer. She joins other former co-founders, such as Pankaj Chaddah, Gaurav Gupta, Mohit Gupta, and Gunjan Patidar, who have also recently exited the company.

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