Shares of Zomato, the food aggregator, fell nearly 4 per cent on Tuesday after tanking over 7 per cent in intra-day trades as investors reacted negatively to a new ESOP plan.

The Zomato share ended with losses of 3.82 per cent at ₹193.70 on the BSE after plummeting 7.19 per cent to ₹186.90 during the day. On the NSE, the scrip ended 2.30 per cent lower at ₹196.65.

This selling came despite Zomato reporting a consolidated net profit of ₹175 crore in the January-March quarter following higher revenues and brokerages raising their target price on the stock. Zomato had posted a consolidated net loss of ₹188 crore in the same quarter of the last fiscal.

Consolidated revenue from operations was at ₹3,562 crore compared with ₹2,056 crore in the year-ago period.

Market circles attributed the lower close to the company’s decision to create an additional ESOP pool of 18.2 crore shares.

At a post-earnings call, the Zomato management reportedly said that costs incurred under ESOPs are non-cash expenses and they are likely to increase in the current fiscal.

For the fiscal ended on March 31, Zomato posted a consolidated net profit of ₹351 crore against a net loss of ₹971 crore in 2022-23.

Zomato managing director & CEO Deepinder Goyal said the food delivery GOV (gross order value) growth continues to be strong at 28 per cent year-on-year.