Moore sells entire stake in Zomato; Zomato Allots INR 4.65 Cr Worth ESOPs

Zomato

According to block sale data, venture capital firm Moore Strategic Ventures has sold its entire stake in Zomato of 4.25 Cr shares at INR 44 apiece.

Moore sold its shares in Zomato for INR 187 Cr; the VC company bought shares in the form of 6,347 Mandatorily Convertible Series G shares from Nexus Ventures in January 2021 for 191 cr. Therefore, Moore ultimately booked a loss of INR 4 on his investment in Zomato.

The food delivery startup came under massive selling pressure at the end of last week as the one-year period for inside investors ended on July 23, 2022, a year after the company’s shares went public at a massive premium.

Zomato has also allotted INR 1 par value shares worth 4.65 Cr (~$583,000) to employees of the company as well as subsidiaries under its 2018 and 2021 stock option plans.

Under the 2018 plan, Zomato has allotted ESOP shares worth 63.5 Lakh, while under the 2021 scheme, it has given shares worth 4.02 Cr. With this, the company’s total equity allocation now stands at INR 792.02, up from INR 787.36.

In a letter to the stock exchanges, the listed startup wrote, “With reference to [the subject], we would like to inform you that the Nomination and Remuneration Committee of the Board of Directors of the company in its meeting held on July 25, 2022, has approved the allotment of 4,65,51,600 equity shares of the face value of INR 1 each, as fully paid, to identified employees of the company and its subsidiaries upon exercise of vested options.”

The developments come at a time when Zomato shares are not doing well on the stock exchanges. Zomato’s share price hit a new low of INR 41.65 on July 27, 2022, and has fallen by more than 47% in the last three months. While Zomato had an impressive debut in the stock market, it wiped over 45% of its value from its offering price within a year of its IPO. Shares of Zomato have fallen more than 18% in the last five days.

The current decline has been attributed to intense selling following the expiry of the one-year lock-in period for Zomat promoters, company employees, founders and others. Zomato’s acquisition of Blinkit also added to investors’ woes.

Despite the dip, US-based investment bank Jefferies has maintained its ‘buy’ rating on Zomata with a price target of INR 100 (upside scenario of INR 160 and downside scenario of INR 40).

Also earlier, when Zomato’s price fell to a then-low of INR 58.65, Zomato CEO Deepinder Goyal donated his $90 million ESOP proceeds to the Zomato Future Foundation for the company’s gig employees.

The food-tech giant is also working with India’s competition watchdog, the Competition Commission of India (CCI), to help investigate the conduct of the food tech platform and its rival Swiggy.

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