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 at the National Stock Exchange (NSE), reflecting a premium of 7.7% over the issue price of ₹390.

On the Bombay Stock Exchange (BSE), shares of Swiggy opened at ₹412, marking an increase of 5.64% from the IPO price. The listing is also set to unlock 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 ESOPs outstanding in September 2024 was 231 million, totaling ₹9,046.65 crore based on the upper IPO price range of ₹390 per share.

The move is expected to catapult nearly 500 Swiggy employees into the “crorepati” league, with their shares now worth crores of rupees, marking a substantial financial milestone for the company’s workforce.

These employees are part of a larger group of approximately 5,000 employees who are set to benefit from the ESOP payout, as reported Economic times.

The report highlighted that e-commerce giant Flipkart, which has been one of the biggest wealth creators in the internet economy, has carried out ESOP buybacks totaling $1.5 billion in various tranches over the years.

Meanwhile, Swiggy’s rival Zomato, which went public in July 2021, raked in $18 millionaires through it. ₹9,375 crore IPO. The report further mentioned that at the time of Paytm’s IPO in November 2021, around 350 employees, both current and former, have become crorepatis.

SEBI exemption allows employees to sell shares earlier

Swiggy’s DRHP report revealed that the company has introduced three ESOP plans till date: Swiggy Employee Stock Option Plan 2015, Swiggy Employee Stock Option Plan 2021 and Swiggy Employee Stock Option Plan 2024.

Additionally, Swiggy got an exemption from the Securities and Exchange Board of India (SEBI) in July this year, allowing its employees to sell shares just a month after the IPO, instead of waiting for the usual one-year lock-up period. This move is expected to increase their opportunities for wealth creation.

However, the exercise of ESOPs will result in increased liquidity of the shares, potentially diluting the equity holdings of existing shareholders, which could affect the market price of Swiggy shares.

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