SoftBank Looking At Full Exit From Zomato Following 1.17% Block Deal Sale

Japanese investor SoftBank is planning to completely divest its holdings in foodtech giant Zomato through open market transactions in the upcoming months. This comes after SoftBank gained a profit exceeding INR 100 Cr by divesting a portion of its stake in the company earlier this week.

SoftBank also holds another 2.18% stake in Zomato, and it is actively looking at divesting this stake through block deals in the upcoming months, Moneycontrol reported.

The Japanese investor offloaded 10 Cr Zomato shares at an average floor price of INR 94.70 per share, in contrast to their average acquisition cost of INR 83-85 per share. This resulted in a per-share profit ranging between INR 10-12.

The development follows the expiration of the lock-in period for Blinkit investors, who received Zomato shares following the acquisition of the quick commerce player by the foodtech giant. SoftBank, which was an investor in Blinkit, received a stake of 3.35% in Zomato post the acquisition last year.

Given that Zomato was not SoftBank’s initial investment, the investor is not willing to retain the stake in the company.

“For SoftBank, Zomato is just a monetary transaction, unlike Delhivery, Paytm or PB Fintech, which it entered as a direct strategic investor. So, it is looking at the deal only from a monetary perspective. It was waiting for Zomato to turn into a profitable bet and now that it has, it will look to exit the company fully as and when it gets opportunities,” the report added, quoting a source.

Zomato acquired the quick-commerce player in August last year in an INR 4,447 Cr deal. The shares were subject to a 12-month lock-in. Besides SoftBank, two other VC firms, Peak XV and Tiger Global, also received Zomato shares as part of Blinkit’s acquisition.

Investment firm Tiger Global also exited Zomato by selling 12.24 Cr shares, equivalent to a 1.44% stake, on Monday through open market transactions. Tiger Global’s Internet Fund III Pte Ltd sold the shares in multiple tranches at an average price of INR 91.01 per share, totaling INR 1,123.84 Cr, according to BSE bulk deal data.

In Q1 FY24, Zomato posted a consolidated profit after tax (PAT) of INR 2 Cr as against a net loss of INR 186 Cr in the corresponding quarter of the previous fiscal year.

The gross order value (GOV) of Zomato’s food delivery business stood at INR 7,318 Cr in Q1 FY24 as against INR 6,425 Cr in the corresponding quarter of the last fiscal.