Imagine being one of the 500 employees whose lives are about to change forever as Swiggy, India’s leading food delivery giant, launches its initial public offering (IPO). With a public listing set to unlock ₹9,000 crore worth of employee stock option plans (ESOPs), Swiggy is poised to propel these employees into the ‘crorepati’ club, creating one of the largest wealth generation events in India’s startup ecosystem.
With a large ESOP pool, Swiggy’s IPO has attracted significant attention. The Bengaluru-based company has made a name for itself in the food delivery industry and now stands as a testament to the financial opportunities for employees in high-growth tech companies.
What are ESOPs
ESOPs, or Employee Stock Option Plans, are powerful tools for companies to compensate employees by offering them a stake in the company. Instead of or in addition to a traditional salary, employees are granted options to buy shares in the company at a set price, often below the market value.
These options can later be exercised, allowing employees to convert them into shares. Employees then can either hold onto these shares, hoping for a further increase in value, or sell them, realizing their gains.
ESOPs at Swiggy
Swiggy has rolled out three major ESOP plans, initiated in 2015, 2021, and 2024, totaling nearly 230 million shares. Of these, around 9 million options have already been exercised, leaving a substantial portion still available for employees to convert into shares.
The most recent ESOP grants included significant allocations to Swiggy’s leadership team, with close to ₹2,600 crore going to top executives like CEO Sriharsha Majety, CTO Madhusudhan Rao, and other senior company figures.
| Name | Designation | ESOP Liquidity (in Cr.) |
| Sriharsha Majety | Cofounder & Group CEO | 1894.11 |
| Amitesh Jha | CEO Instamart | 126.41 |
| Rohit Kapoor | CEO Food Marketplace | 92.63 |
| Rahul Bothra | Chief Financial Officer | 81.73 |
| Madhusudan Rao | Chief Technology Officer | 81.73 |
| Girish Menon | Chief Human Resources Officer | 81.73 |
| Phani Kishan | Cofounder and Chief Growth Officer | 81.73 |
| Nandan Reddy | Cofounder and Head of Innovation | 81.73 |
| Ashwath Swaminathan | Ex-chief Growth and Marketing Officer | 54.48 |
In addition to this year’s IPO, Swiggy has previously facilitated liquidity for employees by allowing them to cash out some of their ESOPs. For instance, a buyback of ESOPs in July 2023 generated over ₹500 crore in liquidity for employees.
Swiggy’s IPO and the Market Impact
Swiggy’s IPO, valued at around ₹11,300 crore, is the biggest public offering by an Indian tech company since Paytm’s IPO in 2021. Institutional investors have shown a robust interest, with the IPO subscribed 3.59 times. Swiggy’s strong market performance has added to the enthusiasm, making it one of the most awaited listings of the year.
This enthusiasm isn’t surprising. Swiggy’s major rival, Zomato, made waves in the industry when it went public in July 2021, creating 18 dollar millionaires and minting wealth for numerous employees. Similarly, Paytm’s 2021 IPO led to financial gains for around 350 employees, many of whom became crorepatis overnight. Swiggy continues this trend in the consumer internet sector, solidifying its role as a key player in India’s tech ecosystem. Source: Economic Times
The Financial Mechanics
Employees converting their ESOPs to shares are liable to pay tax on the difference between Swiggy’s current share price and the price at which their options were granted. Swiggy has partnered with several financial platforms to ease this conversion process and support employees with the necessary financing.
Lock-in Exemptions
One unique advantage Swiggy employees have is an exemption from the mandatory one-year lock-in period. In July 2023, the Securities and Exchange Board of India (SEBI) granted Swiggy employees the ability to sell shares just a month after the IPO. This early liquidity option significantly boosts employees’ financial flexibility, allowing them to capitalize on their newly acquired wealth sooner than expected.
Swiggy’s Wealth Creation and the Startup Ecosystem
The economic impact of Swiggy’s ESOP liquidity event is expected to extend beyond individual wealth creation. Employees who gain substantial wealth through ESOPs often explore new ventures, invest in property, or build assets, potentially stimulating local economies. The wealth generated from Swiggy’s IPO could ripple out, with some employees even choosing to establish their startups, further enriching India’s entrepreneurial ecosystem.
Other consumer internet companies have also conducted significant ESOP buybacks and IPO events in recent years. Flipkart, a leader in India’s e-commerce sector, has conducted multiple ESOP buybacks, amounting to a total payout of $1.5 billion over several years. In 2023 alone, Flipkart paid out $700 million to its employees following its separation from PhonePe. Razorpay, another prominent Indian startup, conducted four ESOP buybacks between 2018 and 2022, generating over $90 million for 1,900 employees.
Companies such as Meesho, Urban Company, and Purplle have joined this trend by facilitating ESOP buybacks for their employees, enhancing wealth creation opportunities across the startup sector. The increase in ESOP-based wealth generation marks a pivotal shift in the Indian job market, where employees are not just earning salaries but are building substantial financial assets.
A Transformative Moment for Swiggy and Its Employees
As Swiggy goes public, nearly 5,000 current and former employees stand to benefit from its ₹9,000 crore ESOP pool, marking one of the largest wealth creation events in India’s startup history. The IPO provides a financial breakthrough for around 500 employees, who will join the ranks of the country’s ‘crorepatis.’
The journey of Swiggy’s employees highlights the transformative power of ESOPs as startups and established companies continue to leverage stock options to attract, retain, and reward talent.
Conclusion
Swiggy’s IPO is a significant step for the company and a momentous event for its employees, who have been instrumental in driving its success. As these employees stand on the brink of newfound financial freedom, Swiggy’s IPO is a powerful reminder of the opportunities in India’s vibrant and fast-evolving startup ecosystem.
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I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.
