Zomato Shares Surge More Than 5% Amidst Reports of Block Deal Activity

On Monday, following the conclusion of the lock-in period for Blinkit on August 25, Zomato Ltd. experienced a shift in its equity, involving 2.14% of its shares.

The Zomato shares acquired through the Blinkit deal were made available for trading.

A total of 18.4 Cr shares were traded within a price range of INR 92.20 to INR 94.00, as per Bloomberg’s data on major trades. The identities of the buyers and sellers are undisclosed at this time.

Among the investors subject to the lock-in period were names such as the Japanese tech giant SoftBank, along with venture capital firms Tiger Global and Peak XV (formerly known as Sequoia India). Out of these, SoftBank holds a 3.55% stake in Zomato, which was associated with an implied share value of INR 70.76 per share, at the time of the deal.

Shares of Zomato jumped over 5.5% to INR 96 in Monday’s trade on BSE.

Last week, reports emerged that SoftBank was considering offloading additional shares of foodtech giant Zomato via block trades.

SoftBank, which was also an investor in Blinkit, received Zomato shares after the company acquired the quick-commerce player in August last year in an INR 4,447 Cr deal. The shares were subject to a 12-month lock-in.

Two other VC firms, Peak XV and Tiger Global, also received Zomato shares as part of Blinkit’s acquisition.

Following Zomato’s financial turnaround, which saw the foodtech major achieve profitability in the April to June quarter, its shares have been on an upward trend since the end of March this year.

In its pursuit of profitability, the foodtech leader has expanded the scope of its platform fee to a broader user base and has also increased the fee. Originally charging a fee of INR 2 per order for select users, Zomato has raised the platform fee to INR 3 for some users in Tier II cities, according to information gathered by Inc42. Meanwhile, the fee remains at INR 2 for the majority of users in metro areas.

In Q1 FY24, Zomato posted a consolidated profit after tax (PAT) of INR 2 Cr as against a net loss of INR 186 Cr in the corresponding quarter of the previous fiscal year.

The gross order value (GOV) of Zomato’s food delivery business stood at INR 7,318 Cr in Q1 FY24 as against INR 6,425 Cr in the corresponding quarter of the last fiscal.