INDIA – Food delivery platform Swiggy has announced it has granted US$271 million worth of employee stock options (ESOPs) to its founders and top management as part of its latest stock-based compensation plan according to its pre-listing prospectus.
The food delivery platform is expected to be listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) from October 23.
According to the pre-listing prospectus, Swiggy’s founder and CEO Sriharsha Majety will get US$200 million worth of ESOPs. The ESOPs plan comes with a vesting period of 1-8 years from the grant date.
The vesting period means any changes in the delivery platform’s stock price after the public listing could result in valuation changes for the stock rewards.
The CEO holds a 6.23% stake in the company on a fully diluted basis. According to the prospectus, the employee stock options scheme could result in Majety gaining an additional stake of 2.2-2.5%.
Majety announced he would be selling a stake worth US$7.5 million through the IPOS’s offer for sale (OFS) component.
The remaining stock options will be awarded to cofounders Phani Kishan Addepalli and Nandan Reddy. Addepalli doubles as the company’s Chief Growth Officer while Reddy doubles as the company’s head of innovation.
They will also be awarded to Chief Financial Officer Rahul Bothra, Chief Technology Officer Madhusudhan Rao, food marketplace CEO Rohit Kapoor, and Amitesh Jha, newly appointed CEO of Swiggy Instamart.
The additional stocks offered to founders of IPO-bound companies are usually an incentive to perform before they go public.
The trend is especially prevalent in e-commerce firms where the founders witness heavy dilution of their shares over different fundraising rounds.
The delivery platform had made regulatory filings for its US$1.25 billion IPO with the Securities and Exchange Board of India (Sebi). In late September, Swiggy filed an updated draft prospectus after the regulator’s approval.
Apart from the founders and top management, top-tier investors set to participate in the OFS component of the IPO issue include Swiggy’s largest investor Prosus, Elevation Capital, Norwest Venture Partners, Coatue, Accel, and Alpha Wave Global.
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