How Swiggy listing turns its hundreds of employees into crorepatis overnight

Swiggy had secured an exemption from the SEBI in July this year, allowing its employees to sell shares just one month after the IPO instead of waiting for the usual one-year lock-in period.
Swiggy Ltd.CEO Sriharsha Majety, National Stock Exchange MD & CEO Ashishkumar Chauhan with delivery boys at the Swiggy bell ringing listing ceremony, at the National Stock Excgange, in Mumbai, Wednesday, Nov. 13, 2024.
Swiggy Ltd.CEO Sriharsha Majety, National Stock Exchange MD & CEO Ashishkumar Chauhan with delivery boys at the Swiggy bell ringing listing ceremony, at the National Stock Excgange, in Mumbai, Wednesday, Nov. 13, 2024.Photo | PTI
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Shares of food delivery giant Swiggy, which debuted on the stock market on Wednesday following a successful IPO (Initial Public Offering), began trading at a 7.7 percent premium over the offer price of Rs 390 per share on their first day. The stock listed at Rs 420 per share on the National Stock Exchange.

The company's employee stock options (ESOPs), among the most valuable in India's startup ecosystem, are set to make eligible employees millionaires overnight.

As of September 2024, around 5,000 Swiggy employees who were eligible for its ESOP program held a total of 231 million shares. At the IPO price, these shares are worth Rs 9,046.65 crore. Based on the current stock value, it is estimated that at least 500 employees have already become billionaires.

Before this, Flipkart executed a similar initiative, distributing a staggering 1.4-1.5 billion shares to its current and former employees, marking one of the largest wealth generation events in the Indian startup landscape.

Meanwhile, its archrival, Zomato, which went public in July 2021 with its ₹9,375 crore IPO, distributed 11,997,768 shares under its ESOP schemes last month.

Furthermore, many news reports noted that at the time of Paytm’s IPO in November 2021, around 350 employees, both current and former, became crorepatis through ESOPs.

Food delivery giant Swiggy's $1.3 billion share sale was subscribed more than three times last week, with shares priced at the upper band at Rs ₹390 apiece. It marked India’s second-largest listing this year, trailing only Hyundai Motor India's record-breaking $3.3 billion IPO.

However, Swiggy had secured an exemption from the Securities and Exchange Board of India (SEBI) in July this year, allowing its employees to sell shares just one month after the IPO instead of waiting for the usual one-year lock-in period. With this move, we can expect the food delivery giant to enhance their wealth-creation opportunities.

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