Zomato’s CEO and Managing Director, Deepinder Goyal, has once again shown his commitment to the company by willingly forgoing his ₹3.5 crore yearly compensation until the end of FY26. This outstanding choice demonstrates his faith in Zomato’s success story and prolongs his previous pledge to forgo compensation by an additional two years.
Credits: Money Control
A Continuing Commitment to Zomato’s Success
Goyal’s choice to sacrifice his pay is not a novel one. He had declared in FY21 that he would not be paid for 36 months, until March 2024. With the most recent extension, Goyal agreed to work until March 31, 2026, without receiving a set salary.
Goyal will continue to serve as the company’s MD and CEO, carrying out his duties during this critical expansion phase, even though he will not be receiving his yearly compensation. Although he will not be paid a set salary, he is still eligible for variable pay, which will be decided in the future by Zomato’s board.
The Rise of Zomato: A Year of Achievements
With its stock rising more than 140% so far this year, Zomato has had an incredible year. With its shares selling at ₹277.35, the company’s market value reached an astounding ₹2.45 lakh crore ($28.8 billion) as of November 26, 2024. Zomato’s standing as a major force in India’s tech sector is strengthened by this expansion.
Goyal’s personal investment in Zomato has increased as a result of the company’s valuation jump. With 4.18% of the company, his investment is currently valued at over ₹10,000 crore, demonstrating the high level of confidence investors have in Zomato’s future.
Inclusion in the Sensex: A Historic Milestone
Zomato recently achieved a significant milestone by becoming the first new-age company to be included in the prestigious 30-stock Sensex index. This inclusion not only elevates Zomato’s profile but also underscores its growing importance in the Indian market.
This achievement has been accompanied by approval for a ₹8,500 crore ($1 billion) Qualified Institutional Placement (QIP) aimed at strengthening Zomato’s financial reserves. The company has set a floor price of ₹265.91 per share for the QIP, with the potential to offer up to a 5% discount.
Zomato’s Game Plan: Strengthening Blinkit and Beyond
The funds raised through the QIP will be strategically deployed to fuel Zomato’s expansion and counter rising competition from rivals like Zepto and Swiggy. Zomato’s quick commerce arm, Blinkit, which leads the market, is a key focus area.
Here’s how Zomato plans to use the ₹8,500 crore raised:
Dark Stores and Warehousing: ₹2,137 crore ($250 million) will be invested in setting up and operating dark stores and warehouses to enhance Blinkit’s operational efficiency.
Marketing and Branding: ₹2,492 crore will be allocated to advertising, marketing, and branding initiatives to solidify Zomato’s market position.
Technology and Infrastructure: ₹1,769 crore will go towards building cutting-edge tech and infrastructure capabilities.
General Corporate Purposes: The remainder will be set aside for corporate needs.
This financial boost positions Zomato to maintain its market leadership and respond to aggressive moves by competitors.
Credits: India Today
Challenges in a Competitive Market
Zomato is doing well, but the market for rapid commerce is becoming more competitive. Rising star Zepto is now the second-biggest participant in the rapid commerce space, surpassing Swiggy Instamart. This year, Zepto has raised an additional $1.35 billion, and it is rapidly growing its network of dark stores.
Another strong rival is Swiggy, which made its stock market debut earlier this month. Zomato is prepared to meet these problems because its cash reserves are expected to reach ₹19,300 crore ($2.3 billion) after QIP.
Leadership by Example
Deepinder Goyal’s decision to waive his salary until FY26 is a testament to his visionary leadership. By aligning his personal goals with Zomato’s success, Goyal has sent a strong message to shareholders, employees, and competitors alike. His move demonstrates confidence in Zomato’s future and inspires trust among stakeholders.
Looking Ahead: Zomato’s Path to Dominance
Zomato’s goal to rule the rapid commerce and meal delivery industries is demonstrated by its emphasis on bolstering Blinkit, making technological investments, and increasing its marketing initiatives.
Zomato has a strong basis for long-term growth because to its smart investments and substantial cash reserves, even as competition from Zepto and Swiggy heats up. Zomato is in a strong position to influence the direction of India’s digital economy under the direction of a visionary CEO like Deepinder Goyal. In the ever changing tech sector, Zomato’s journey is still worth following as it innovates and grows.
