Zomato Opens INR 8,500 Cr QIP, Sets Floor Price At INR 265.91

Zomato Opens INR 8,500 Cr QIP, Sets Floor Price At INR 265.91

SUMMARY

Zomato has opened its INR 8,500 Cr qualified institutions placement (QIP) and set a floor price of INR 265.91 per equity share

The floor price of the fresh issue is 2.8% lower than Zomato's closing price today, INR 273.60

This comes about two days after Zomato received approval from its shareholders to raise INR 8,500 Cr (around $1 Bn) through the QIP

Foodtech major Zomato has opened its INR 8,500 Cr qualified institutions placement (QIP) and set a floor price of INR 265.91 per equity share, a discount of 2.8% from its closing price today. 

In an exchange filing, the company said that the fund raising committee of its board approved the opening of the QIP on Monday (November 25).

Zomato said that the QIP issue price would be decided in consultation with the book running lead manager and it may offer a discount of not more than 5% on the floor price. 

This comes about two days after Zomato received approval from its shareholders to raise INR 8,500 Cr (around $1 Bn) through the QIP. 

The company disclosed its plans to undertake its first fundraise post listing in October this year. In its shareholders’ letter for the second quarter of the fiscal year, founder and CEO Deepinder Goyal said that the capital will enhance Zomato’s cash reserves.

“We believe that we need to enhance our cash balance given the competitive landscape and the much larger scale of our business today. We believe that capital by itself does not give anyone the right to win, but we want to ensure that we are on a level playing field with our competitors, who continue to raise additional capital,” he said then.

Since October, the company’s major competitors, Swiggy in the food delivery and quick commerce segment and Zepto in the 10-minute delivery space, have seen a significant capital infusion. 

Earlier this month, Swiggy turned into a publicly listed company and raised INR 11327.43 Cr from issuance of fresh shares in its initial public offering (IPO). The company plans to deploy the capital to boost Swiggy Instamart’s dark store network, invest in its logistics subsidiary Scootsy, brand marketing and acquisitions, among others.

Meanwhile, quick commerce unicorn Zepto raised another $350 Mn last week. With this, it became the most heavily funded startup this year, raising over $1.3 Bn in 2024 alone. With the fresh funds, Zepto continues to expand its dark store network to challenge Zomato-owned Blinkit’s leadership in the 10-minute delivery sector. 

On the other hand, Zomato has seen positive developments on the bourses in recent weeks. Last week, the BSE announced the addition of the stock to the benchmark index, BSE Sensex, from December 23. Earlier in November, the NSE added the company’s shares to the futures and options (F&O) segment

On the financial front, Zomato reported a net profit of INR 176 Cr in Q2 FY25, a whopping 389% increase from the INR 36 Cr profit in the year-ago period. Operating revenue also zoomed 68.5% to INR 4,799 Cr during the quarter from INR 2,848 Cr in Q2 FY24.

However, the company’s cash reserves declined to INR 1,726 Cr at the end of the September 2024 quarter due to the acquisition of Paytm Insider for INR 2,048 Cr.

With the acquisition, the company launched a separate app for its “Going Out” vertical named ‘District’. Launched on November 16, the app enables customers to discover and reserve tables at restaurants while also booking tickets for movies, sports, live performances, among other events.

Shares of Zomato ended today’s trading session 3.58% higher at INR 273.60.

You have reached your limit of free stories
Become An Inc42 Plus Member

Become a Startup Insider in 2024 with Inc42 Plus. Join our exclusive community of 10,000+ founders, investors & operators and stay ahead in India’s startup & business economy.

2 YEAR PLAN
₹19999
₹7999
₹333/Month
UNLOCK 60% OFF
Cancel Anytime
1 YEAR PLAN
₹9999
₹4999
₹416/Month
UNLOCK 50% OFF
Cancel Anytime
Already A Member?
Discover Startups & Business Models

Unleash your potential by exploring unlimited articles, trackers, and playbooks. Identify the hottest startup deals, supercharge your innovation projects, and stay updated with expert curation.

Zomato Opens INR 8,500 Cr QIP, Sets Floor Price At INR 265.91-Inc42 Media
How-To’s on Starting & Scaling Up

Empower yourself with comprehensive playbooks, expert analysis, and invaluable insights. Learn to validate ideas, acquire customers, secure funding, and navigate the journey to startup success.

Zomato Opens INR 8,500 Cr QIP, Sets Floor Price At INR 265.91-Inc42 Media
Identify Trends & New Markets

Access 75+ in-depth reports on frontier industries. Gain exclusive market intelligence, understand market landscapes, and decode emerging trends to make informed decisions.

Zomato Opens INR 8,500 Cr QIP, Sets Floor Price At INR 265.91-Inc42 Media
Track & Decode the Investment Landscape

Stay ahead with startup and funding trackers. Analyse investment strategies, profile successful investors, and keep track of upcoming funds, accelerators, and more.

Zomato Opens INR 8,500 Cr QIP, Sets Floor Price At INR 265.91-Inc42 Media
Zomato Opens INR 8,500 Cr QIP, Sets Floor Price At INR 265.91-Inc42 Media
You’re in Good company