Food tech major Swiggy’s IPO is set to unlock wealth to the tune of ₹9000 crore in employee stock ownership plan (Esop) wealth for its current and former employees, making it one of the largest wealth creation exercises of its kind in India’s startup ecosystem.
Nearly 5,000 current and former employees are set to benefit, with around 500 Swiggy employees to enter the ‘crore-pati’ club when the firm makes its stock market debut, according to sources.
Till date, Swiggy has distributed ₹500 crore in Esops. In July this year, the company had announced its plan to buy back stocks worth up to $65 million.
This kind of wealth creation by a new-age company is unmatched at this scale apart from Flipkart which has undertaken bigger scale of buyback or payouts in the past. In 2023, Flipkart had paid out a total of $700 million to 17,000 employees.
Overall, Flipkart had over five share buybacks worth $1.4-1.5 billion in total over the past years.
Swiggy’s founders and top management of Swiggy were allocated Esops worth nearly $271 million in its latest stock ownership plan.
It includes founder and group CEO Sriharsha Majety, cofounders Nandan Reddy and Phani Kishan Addepalli, chief financial officer Rahul Bothra, chief technology officer Madhusudhan Rao, food marketplace CEO Rohit Kapoor, and newly appointed CEO of Swiggy Instamart, Amitesh Jha.
Swiggy’s ₹11,300-crore-IPO was subscribed 3.59 times primarily driven by interest from institutional investors. The price band of the IPO was ₹371-390 a piece. It will debut trading on bourses on Wednesday.
Zomato also created wealth for its employees during its IPO in 2021. It had an ESOP pool of around ₹7,000 crore during its IPO.
In 2021, Zomato awarded its founder and CEO Deepinder Goyal with stock-based compensation worth nearly $376 million at the time.
As of June 30, Goyal held a 4.2 per cent stake in Zomato worth over $1.2 billion.