Zomato also said that Zomato Payment Private Limited has decided to voluntarily surrender its application with the RBI to operate as an issuer of prepaid payment instruments
In January, the foodtech giant said it received the licence from the central bank to operate as an online payment aggregator, with effect from January 24, 2024.
Zomato announced the incorporation of ZPPL in 2021 as its wholly owned subsidiary to carry out the business as a payment aggregator and an issuer of prepaid payment instruments
Food tech major Zomato’s subsidiary Zomato
Payment Private Limited (ZPPL) has decided to voluntarily surrender the certificate of authorisation it obtained from the Reserve Bank of India (RBI) to operate as an online payment aggregator.
The company disclosed this in its Q4 FY24 financial filings.
It further added, “ZPPL has also decided to voluntarily surrender its application with the RBI (for which it previously received in-principle authorisation) to operate as an issuer of pre-paid payment instruments under the Payment and Settlement Systems Act, 2007 and the Master Direction on Prepaid Payment Instruments. However, the other operations of ZPPL will continue.”
The development comes months after the company received the licence from the central bank to operate as an online payment aggregator, with effect from January 24, 2024.
Zomato announced the incorporation of ZPPL in 2021 as its wholly owned subsidiary to carry out the business as a payment aggregator and an issuer of prepaid payment instruments.
It is pertinent to note that Zomato also rolled out an in-house Unified Payments Interface (UPI) service for peer-to-peer (P2P) and merchant transactions last year. However, there were also reports that the company paused onboarding new users in its UPI vertical.
Zomato said that in Q4, it also recognised an impairment loss of INR 39 Cr in the profit and loss account, as an exceptional item, on its investment in ZPPL.
Meanwhile, Zomato posted its fourth straight profitable quarter in Q4 FY24, with profit after tax (PAT) surging almost 27% quarter-on-quarter (QoQ) to INR 175 Cr.
However, its operating revenue grew only 8% QoQ and over 73% year-on-year (YoY) to INR 3,562 Cr in Q4.
The gross order value (GOV) across its B2C businesses, which includes food delivery, quick commerce, and going-out, increased 51% YoY and merely 5% QoQ to INR 13,536 Cr. It is pertinent to note that Zomato witnessed some degrowth in the GOV of its core food delivery business in the reported quarter.
Food delivery GOV grew 28% YoY but fell 0.6% QoQ to INR 8,439 Cr in the reported quarter. Meanwhile, average monthly transacting customers for the food delivery business rose to 19 Mn in Q4 from 18.8 Mn in the preceding quarter.
Zomato continued to show improvement in the financials of its quick commerce vertical Blinkit, which also turned adjusted EBITDA positive in the month of March 2024.
“We have only always started a business to protect/grow something that we already have, with a singular goal – survive. Even when we acquired Blinkit, we outlined that one of the key reasons to acquire the business was to defend the food delivery business, because a well entrenched quick commerce player could pose an easy threat to the food delivery business in the long term, said Deepinder Goyal, CEO of Zomato, during the company’s Q4 earnings announcement.
Meanwhile, the shares of Zomato, which touched its all-time high at INR 207.3 during the early trading hours on Monday (May 13), slumped 7% after the announcement of the results. However, the stock pared its losses to end today’s session 3.8% lower at INR 193.7 on the BSE.
