Swiggy Launches Fifth ESOP Worth Rs 540 Crore for Employees

IPO-bound company Swiggy, which delivers food and groceries in India, is set to release its IPO in a few weeks. Before that, they announced on Monday its fifth ESOP (Employee Stock Ownership Plan). Under this plan, various levels and functional employees have access to funds worth Rs. 540 crore. With this fifth liquidity event since 2018 and the third in a row following July 2022 and 2023, Swiggy is among the few start-ups that consistently provide opportunities for its employees to build wealth. Over 3,200 workers have benefited thus far from the company’s cumulative facilitation of over Rs 1,000 crore in ESOP liquidity throughout five events.  Girish Menon, who is the head of the HR department, said that unlocking the wealth creation opportunity for the employees is the top priority for  Swiggy. When employees own shares in their company, it aligns their incentives and cultivates a firm commitment to collaborative excellence. We strongly believe in and promote this virtuous cycle. The latest ESOP by Swiggy is a small gesture towards the hard-working employees who are the reason behind Swiggy’s massive success and the love it receives from consumers. This reward is exclusively for their employees.

Initial Public Offering (IPO) worth Rs. 10,400 crores:

Zomato Bengaluru-based Swiggy is also set to go for the IPO after a few weeks, and through that, they want to raise Rs. 10,400 crores, which they are going to use for the massive expansion in different cities of India and can go head-to-head with Zomato, as per the sources.

Competitor Zomato offers Rs 892.19 crores of shares:

Swiggy’s competitor Zomato has recently announced that they are offering Rs. 892.19 crores of stock-approved ESOP grants under their 2014 and 2021 plans.

Swiggy’s previous fundraising and valuation: 

As of April 30, Invesco, a prominent US investment firm that was a lead investor in Swiggy’s previous funding round, has made a small adjustment to the fair value of the food delivery giant, which is slightly lower than it was a quarter ago. In 2022, Swiggy raised $700 million in funding from Invesco, doubling its valuation to $10.7 billion. Last year, due to high cash burn and poor margins, the company’s valuation decreased.

However, this year, they turned things around by raising $1 billion through an IPO. This approach shifted investors’ mindsets, leading Invesco to increase Swiggy’s valuation by 19% to $12.7 billion. Additionally, a fund run by US-based asset management company Baron Capital Group increased the valuation of food delivery company Swiggy to $15.1 billion this year.

The investor reported a 25% increase over the previous fair value, according to regulatory filings made with the SEC. The most recent valuation represents Swiggy’s value as of March 31. As of December 31, 2023, Baron Capital valued Swiggy at $12.1 billion. Baron had taken part in the $700 million funding round of the company in January 2022.

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Conclusion: Swiggy IPO is all set to release in the next few weeks, and before that, they want to reward their employees. Therefore, they are offering ESOPs worth Rs. 540 crore to acknowledge their commitment to the company.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.