Blinkit founder Albinder Dhindsa leads Rs 419-crore Eternal Esop exercise

Economic Times

4 days ago

ETtech More than 140 executives at Eternal exercised employee stock options worth Rs 419 crore over July 29 and 30, according to stock exchange disclosures made by the parent of food and grocery delivery platforms Zomato and Blinkit.
Blinkit CEO Albinder Dhindsa alone accounted for over half the value, while 31 other top executives also converted options to buy shares worth more than Rs 1 crore each.
They included restaurant grocery supply arm Hyperpure CEO Rishi Arora, former food delivery CEO Rakesh Ranjan, his successor Aditya Mangla, and corporate development head Kunal Swarup. Together, they exercised shares worth Rs 378.50 crore — forming 90% of the two-day transactions. Nearly half of these 32 executives were from Blinkit, while the rest were split between Eternal, Zomato, Hyperpure, and going-out business District, stock market disclosures showed.Dhindsa converted options to buy seven million Eternal shares worth Rs 214.51 crore.His stock option exercise is conducted as per a board-approved schedule, people aware of the matter told ET.To exercise stock options means to buy the shares at a pre-agreed price, as per the employment agreement of the executive. The pre-agreed price, or strike price, at which they can buy the shares could be different for each executive. The strike price is typically lower than the market price.Once exercised, employees can choose to either hold on to the shares or sell them at market rate.
Eternal stock at a high Eternal's stock has been at its highest levels over the last seven months. On Friday, it ended 0.3% lower at Rs 300.80 apiece, valuing the company at Rs 2.9 lakh crore, or $33 billion.'When a company's stock price rises, executives with vested stock options are often encouraged to exercise them,' a chartered accountant with a Big Four firm said. 'If vested options remain outstanding when the share price is on an upswing, the unrealised Esop expense keeps sitting in the company's books and that hurts the bottom line.'Anshuman Das, CEO of executive search firm Longhouse, said, 'Exercising stock options triggers an income tax liability at the point of conversion to shares. When the sums involved are substantial, some executives choose to hold on to their stock, aiming to cover that tax payout with gains from upside in the company's share price.'Among executives who exercised the option, Swarup bought stocks worth Rs 25.2 crore, while Zomato's logistics AVP Aadish Dhakad converted options worth Rs 24.1 crore. Senior Blinkit executives Udit Gupta and Anish Srivastava have exercised stock worth Rs 14.8 crore and Rs 14.1 crore, respectively. Hyperpure's Arora converted options to stock worth Rs 9.5 crore, while Blinkit CTO Sajal Gupta exercised options worth Rs 6.6 crore. 'For senior leaders, it is as much a strategic wealth-creation move as it is a show of confidence in the company's long-term prospects,' Das said.Eternal did not respond to ET's queries.
Blinkit's rapid growth
Blinkit has maintained its leadership position in the fiercely competitive quick commerce segment, where it rivals players such as Zepto, Swiggy's Instamart, Flipkart Minutes, Tata Digital-backed BigBasket, Reliance's JioMart and Amazon Now. For the quarter ended June 30, Blinkit's gross order value (GOV) increased 140% year-on-year to Rs 11,821 crore — surpassing, for the first time, Zomato's GOV of Rs 10,769 crore.
However, competitive intensity in the quick commerce sector and the rapid expansion being undertaken by Blinkit pulled Eternal's net profit down 90% to Rs 25 crore. Blinkit added 243 dark stores during April-June, taking its total store count to 1,544 as of June 30. Eternal announced its intent to open 3,000 stores over time, and said it was on track to have 2,000 such micro warehouses — from where 10-minute deliveries are made — by December.
Also Read: Quick commerce companies slow dark stores buildout to control cash burn 'We continue to believe the street is under-appreciating market share gains for Blinkit over the next two to three quarters as competition focuses on improving profitability, with potential for further share gains beyond FY26 on the back of the new 3,000 store guidance by Blinkit,' brokerage firm Goldman Sachs said in a research note.Eternal (then Zomato) was one of the first large domestic consumer internet startups to go public in July 2021, and it created 18 dollar millionaires through its Rs 9,375 crore initial public offering (IPO). This included founder and CEO Deepinder Goyal, and former top executives Gunjan Patidar, Mohit Gupta, Gaurav Gupta and Akriti Chopra.
Also Read: Blinkit set for margin expansion after driving Q1 for Eternal: Analysts
Stock rewards
Over the past decade of India's internet economy, Flipkart has emerged among the biggest wealth creators, having conducted Esop buybacks aggregating to around $1.5 billion across various tranches since 2018. The ecommerce marketplace rolled out a $50-million Esop buyback this year. 'In fast-growing and highly competitive sectors, where leadership can directly influence growth trajectories and valuations, stock-based incentives align the interests of executives with long-term company performance,' Das of Longhouse said. 'They reward past contributions while also creating a strong motivation for leaders to stay invested in the company's success.'Esops had emerged as a prominent compensation tool in India during the rise of the country's software services giants, with companies such as Infosys using them to reward and retain talent. In the run-up to a public listing, firms often allocate additional stock options to founders and senior executives to incentivise sustained performance and align interests with shareholder value creation.In the case of legacy IT services companies, the gap between the employee wealth pool and founder or promoter wealth was also significant. However, founders in these firms retained a larger shareholding because they relied less on external capital, avoiding the kind of stake dilution seen in many newer, venture-backed businesses. Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. 3 years on, Akasa's next challenge: Staying in the air against IndiGo's dominance
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