Swiggy, the popular food delivery aggregator and a direct competitor to Zomato, made its highly-anticipated stock market debut on November 13. The shares were listed at ₹420 on the National Stock Exchange (NSE), reflecting a 7.7% premium over the issue price of ₹390.
On the Bombay Stock Exchange (BSE), Swiggy’s shares opened at ₹412, marking an increase of 5.64% from the IPO price. The listing is also set to unlock a significant value in the form of employee stock option plans (ESOPs).
According to the company’s Draft Red Herring Prospectus (DRHP) report, the total number of outstanding ESOPs as of September 2024 stood at 231 million, amounting to a total value of ₹9,046.65 crore based on the IPO’s upper price band of ₹390 per share.
This move is expected to catapult nearly 500 employees at Swiggy into the ‘crorepati’ league, with their holdings now worth crores of rupees, marking a substantial financial milestone for the company’s workforce.
These employees are part of a larger group of around 5,000 employees who are set to benefit from the ESOP payout, as reported by the Economic Times.
The report highlighted that e-commerce giant Flipkart, which has been one of the biggest wealth creators in the internet economy, has conducted ESOP buybacks totalling $1.5 billion across various tranches over the years.
Meanwhile, Swiggy’s archrival, Zomato, which went public in July 2021, minted 18 dollar millionaires through its ₹9,375 crore IPO. Furthermore, the report noted that at the time of Paytm’s IPO in November 2021, around 350 employees, both current and former, became crorepatis.
Swiggy’s DRHP report showed that the company has introduced three ESOP plans to date: Swiggy Employee Stock Option Plan 2015, Swiggy Employee Stock Option Plan 2021, and Swiggy Employee Stock Option Plan 2024.
Additionally, Swiggy secured an exemption from the Securities and Exchange Board of India (SEBI) in July this year, allowing its employees to sell shares just one month after the IPO instead of waiting for the usual one-year lock-in period. This move is expected to enhance their wealth-creation opportunities.
However, the exercise of ESOPs will result in increased liquidity of shares, potentially diluting the stakes of existing shareholders, which could affect the market price of Swiggy’s shares.
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