Zomato Receives Final Approval From Indonesian Govt To Liquidate Subsidiary

Foodtech major Zomato on Tuesday (April 20) said it has received the go ahead from the Indonesian government to liquidate its subsidiary in the Southeast Asian country.

In a regulatory filing, the company said it received the final decree, approving the liquidation of Zomato Media Indonesia, from Indonesia’s ministry of law on April 29. 

“… We would like to inform that the ministry of law of Indonesia has issued a final decree letter on April 29, 2024 approving liquidation of PT. Zomato Media Indonesia (“PTZMI”), wholly owned subsidiary of Zomato Limited w.e.f. March 21, 2024,” said the company.

The approval comes a year after the company kickstarted the liquidation process of the subsidiary. The Indonesian arm did not have active business, as per Zomato’s red herring prospectus filed in July 2021. 

In the same document, Zomato said that PTZMI’s net worth was around INR 1.5 Cr, contributing 0.01% to its total net worth.

The foodtech major first forayed into Indonesia almost a decade ago in 2013. However, it appears to have failed to make any headway in the country. The fatal blow came in late-2020 during the Covid-19 pandemic, when the listed company laid off all its employees in Indonesia. 

In February last year, the company formally shut shop in Indonesia and its websites for the country began to display a message that stated that the foodtech had shut operations there.

The development comes at a time when Zomato has been on a spree to dissolve its foreign subsidiaries. In February this year, it announced the completion of the liquidation of its subsidiaries in Vietnam and Czech Republic.

In January, it also initiated the process of dissolving its Polish step-down subsidiary, Gastronauci SP. Z.O.O. Since 2021, it has liquidated subsidiaries in Slovakia, Czech Republic, US, UK, Ireland, New Zealand, Canada, Australia, Jordan and Qatar. 

While the exact reason is not known, the shut down spree could likely have been led by the considerations around streamlining operations and shuttering loss-making subsidiaries that added no real value to the company’s topline.

However, it has doubled down on its presence in India and has unveiled a slew of new offerings and pilots in the past month, including an all-electric large order fleet, a ‘Pure Veg’ fleet, last-mile delivery for office goers inside corporate parks, as well as priority deliveries in parts of Bengaluru and Mumbai.

On the financial front, the foodtech major continues to post healthy profit and revenue growth. Zomato more than quadrupled its net profit sequentially to INR 138 Cr in the quarter ended December 2023. On similar lines, its operating revenue jumped over 15% quarter-on-quarter (QoQ) to INR 3,288 Cr in Q3 FY24. 

Banking on this, shares of Zomato have surged nearly 200% in the past 12 months and the stock is up more than 56% on a year-to-date (YTD) basis. Last week, Goldman Sachs hiked its price target (PT) on the stock by over 40% to INR 240 from INR 170 earlier.

Shares of Zomato ended today’s trading session 0.28% lower at INR 193.05 on the BSE.