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

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.

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