Deepinder Goyal Donates His Zomato Stock Options Worth 8700 Crores
Deepinder Goyal, the co-founder of Zomato Ltd, donated stock worth Rs 700 crore to the Zomato Future Foundation (ZFF) to fund the education of children of Zomato’s delivery partners.
The stock options were awarded to Deepinder Goyal before Zomato went public last year, and some of them vested last month, according to a statement. Before vesting, regulations require a one-year lock-in period.
The Zomato Future Foundation pays towards the education of up to two children of all Zomato delivery partners. For riders who have worked with the firm for more than five years, the foundation pays up to $50,000 per child every year.
After the rider has completed ten years, the reward doubles to one lakh. In the event of sad situations such as accidents, the foundation also supports higher education scholarships, special programs for girl children, and livelihood help for the families of its delivery partners.
According to Deepinder Goyal, the entire profit from the shares will be donated to the organization. To preserve the interests of shareholders and maximize the value of the foundation, Goyal will not sell these shares right away.
“I will liquidate fewer than 10% of these Esops for this fund in the first year,” he said.
In addition to organizing future fundraising events, he stated that the foundation will accept donations from other employees. A separate governance board will be established by the foundation.
Deepinder Goyal’s action demonstrates how far India’s startup environment has progressed, and how more new-age company owners may be joining the ranks of corporate philanthropists.
According to the EdelGive Hurun India Philanthropy List 2021, Azim Premji of Wipro, Shiv Nadar of HCL Technologies, and Mukesh Ambani of Reliance Industries were the top three donors.
Premji was the first Indian to sign the Giving Pledge in 2010, and he has donated 67 percent of Wipro to the Azim Premji Endowment Fund since then.
Warren Buffett, Melinda French Gates, and Bill Gates founded the Giving Pledge to encourage the wealthy to donate the majority of their money to charitable organizations.
The India Philanthropy List included the names of founders of relatively new businesses last year.
Nithin and Nikhil Kamath, the founders of Zerodha, made their debut on the list last year with a donation of Rs 25 crore. Binny Bansal, the co-founder of Flipkart, upped his annual donations by 155% to Rs 14 crore last year.
According to Bain & Co.’s India Philanthropy Report 2022, donations from Indian high net worth individuals may increase as a result of the rise of Indian startups and young IT entrepreneurs.
The objective of forming the ZFF is praiseworthy, according to Shriram Subramanian, founder of corporate governance advisory firm InGovern Research.
“However, unless Zomato focuses on profitability and creating wealth for all stockholders, these Esops may become extinct.” “The stock price of these loss-making unicorns faces a grim future,” noted Subramanian, noting that the Zomato stock price is already below its IPO issue price.
Last year, Zomato became the first Indian digital unicorn to list on the stock market, with its market capitalization quickly reaching $1 trillion. The food aggregator is currently valued at around 47,625 crores, less than half of that. Since SBI Card’s IPO in March 2020, Zomato was the largest initial public offering to hit the Indian stock exchanges.
Zomato’s IPO paved the way for other new-age companies like Paytm, PolicyBazaar, and Nykaa to go public. However, in the aftermath of geopolitical uncertainty and central bank policy tightening, the equities of these new enterprises have taken a beating.