Zomato said its board has approved the allotment of 62.85 Cr fully paid-up equity shares of the company to acquire 33,018 equity shares of BCPL for a total consideration of INR 4,447 Cr
Zomato had announced the acquisition of Blinkit in June in a $568 Mn all-stock deal
Following the announcement of the deal, Zomato had to face a lot of scrutiny and questions over conflict of interest and disclosure
Foodtech startup Zomato on Wednesday (August 10) said that it has completed the acquisition of quick-commerce startup Blinkit.
The stakeholders relationship committee of its board in a meeting approved the allotment of 62.85 Cr fully paid-up equity shares of the company to acquire 33,018 equity shares of Blink Commerce India Private Limited (BCPL), Zomato said in an exchange filing.
BCPL is the parent entity of Blinkit.
“Further, the company has completed acquisition of 100% shareholding of BCPL from its shareholders. Accordingly, BCPL became a wholly owned subsidiary of the company with immediate effect i.e. from August 10, 2022,” the statement added.
Zomato had announced the deal to acquire Blinkit for $568 Mn on June 24, following which the listed startup had to face a lot of scrutiny and questions over conflict of interest and disclosure. Its shares also came under pressure following the announcement of the deal, and fell sharply.
However, the proposal to acquire Blinkit received 97% of shareholders’ approval last month.
All The Odds The Deal Faced
The acquisition of the loss-making Blinkit had led to questions on Zomato’s profitability path. Besides, questions were also raised about its corporate governance standards.
The conflict was around Zomato cofounder and chief people officer Akriti Chopra being married to Blinkit founder Albinder Dhindsa, and the disclosure of the same during the deal announcement.
However, in a letter to shareholders, issued along with the financial results for Q1 FY23, Zomato founder and CEO Deepinder Goyal said that Chopra was never involved in any discussions or decisions with respect to the transaction.
The food delivery startup also had to issue another clarification about the value of the deal on the directions of the Securities and Exchange Board of India (SEBI). The startup said in response that the deal value for Blinkit acquisition was INR 4,500 Cr and not INR 7,500 Cr as computed by some media reports and called the concern “factually incorrect”.
During the announcement of the Blinkit deal in June, Zomato also said that its restaurant supplies grocery subsidiary Zomato Hyperpure would acquire the warehousing and ancillary services business of Hands on Trades Private Limited (HOTPL) for INR 60.7 Cr.
In the filing on Wednesday, it said that Zomato Hyperpure has acquired the warehousing and ancillary services business of HOTPL.
Zomato shares had fallen by as much as 41% to a record low of INR 41.65 in July following the announcement of the Blinkit deal. However, the startup’s Q1 results provided a relief to the stock, leading to a rise in share price.
Zomato reported a narrowing of its net loss to INR 186 Cr in the June quarter of 2022 from INR 360 Cr in the year-ago quarter.
On Wednesday, shares of Zomato ended 0.9% higher at INR 55.95 on the BSE.