Swiggy Gives Founder Sriharsha Majety $271 Million in Esops Ahead of its IPO

Nitin Konde, Varun Bhardwaj

Oct 11, 2024 — 2 min read

Swiggy Founder Sriharsha Majety Receives Esops

According to the company's pre-listing prospectus, Swiggy, a food and grocery delivery service that is about to make its first public offering (IPO), gave its founders and senior management $271 million in employee stock options as part of its most recent stock-based compensation plan, which was implemented in April of this year.

Sriharsha Majety, founder and group chief executive officer of the Bengaluru-based company, has been allocated nearly $200 million worth of this stock. The remaining sum was given to food marketplace CEO Rohit Kapoor, cofounders Nandan Reddy and Phani Kishan Addepalli, chief financial officer Rahul Bothra, chief technology officer Madhusudhan Rao, and recently hired Swiggy Instamart CEO Amitesh Jha.

How This Esop Will Benefit Majety?

Majety, who, on a fully diluted basis, owns 6.23% of the company, may receive an extra 2.2-2.5% interest from the additional Esops awarded under the 2024 programme. Through the offer for sale (OFS) portion of the IPO, he will be selling a share valued at $7.5 million. Majety and Reddy traded Swiggy shares through secondary trades between July and September. Reddy sold shares for $12 million, while Majety offloaded a stake valued at almost $23 million.

While Kapoor, who has been with the firm since August 2022, was given stock options worth $9.8 million under the most recent Esop plan, Jha, who joined Swiggy in September from the online retailer Flipkart, was given options worth $13.3 million. In the most recent Esop scheme, Swiggy's top human resources officer, Girish Menon, was also given $8.6 million worth of stock options.

Esop 2024 Scheme

As per the Esop 2024 scheme, the stock options granted to the senior management of the firm have a vesting term ranging from 1 to 8 years from the date of issue. Following the public listing, any fluctuations in the company's stock price may also have an impact on how much the issued stock rewards are valued.

Founders and senior management are often given additional stock options by companies as a means of encouraging them to perform well prior to going public. In consumer internet companies, where founders witness a significant diluting of their interests over multiple fundraising rounds, this pattern is particularly common.

Swiggy filed regulatory documents with the Securities and Exchange Board of India (Sebi) in April for its $1.25 billion initial public offering (IPO) via the regulator's confidential filing process. With Sebi's permission, it filed an amended draft prospectus in September.

The offering's initial $450 million fresh issue component, however, may be increased to $600 million. Top Swiggy investors to take part in the OFS portion of the deal, in addition to Majety and Reddy, are Prosus, Norwest Venture Partners, Elevation Capital, Accel, Coatue, and Alpha Wave Global, which is the company's largest shareholder.