Uber’s Exit From Zomato: Fidelity, ICICI Prudential Life Insurance Buy Nearly 10 Cr Shares

As Uber offloaded its stake in Zomato on Wednesday (August 3), two major institutional investors – Fidelity and ICICI Prudential Life Insurance – bought stakes in the foodtech major.

Uber sold more than 61.21 Cr shares of Zomato for $392 Mn in a block deal. As per the data available on the BSE, the transaction was executed at a price of INR 50.44 per share. 

The ride-hailing startup exited Zomato with 2X returns.

Fidelity’s Emerging Markets Fund picked up more than 5.44 Cr shares of Zomato at a price of INR 50.26 per share. Similarly, ICICI Prudential Life Insurance also bought 4.50 Cr shares of Zomato at INR 50.25 per share.

In total, ICICI Prudential Life Insurance paid INR 226.12 Cr for the transaction, while Fidelity spent INR 273.55 Cr to acquire the shares of the food delivery company.

A source told Reuters that the stake was bought by around 20 global and Indian funds, including Franklin Templeton. 

BofA (Bank of America) Securities was the sole bookrunner for the block transaction.

This is the second high-profile exit of an institutional investor from Zomato. As the mandatory one year lock-in period for per-IPO investors expired last week, Moore Strategic Ventures also sold 42.5 Mn shares of Zomato at INR 44 apiece. Following this, the startup’s shares plunged to INR 40.55 apiece on July 27.

After months of downturn, the stock has somewhat stabilised in August. Zomato shares even hit upper circuit on August 2 on account of narrowing of loss and rise in revenue in the first quarter of financial year 2022-23 (FY23). 

On Wednesday, shares of Zomato fell 0.36% to end the day at INR 55.40. Zomato shares are trading close to 67% lower from a record high of INR 169.10 of November last year. 

Meanwhile, the BSE has now also sought clarification from the Deepender Goyal-led company on media reports that said that Zomato was transitioning to a multiple CEO regime and all its business arms would be consolidated under a larger organisation called Eternal.

On Tuesday, the foodtech startup issued another clarification on its acquisition of quick-commerce startup Blinkit on the directions of markets regulator SEBI.

Zomato has been under scrutiny over a slew of issues including its acquisition of loss-making Blinkit and an ongoing antitrust probe launched by the Competition Commission of India (CCI).

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