[ad_1]
US ride-hailing giant Uber on Wednesday sold its entire 7.78% stake as part of a block deal in domestic food-delivery company Zomato to pocket Rs 3,088 crore ($390 million). A total of 612 million shares were sold at Rs 50.44 apiece to over a dozen institutional investors. Fidelity Investment Trust Fidelity Series Emerging Markets Fund bought 54.4 million shares worth Rs 274 crore and ICICI Prudential Mutual Fund bought 45 million shares worth Rs 226 crore, showed block deal data.
Shares of Zomato got whipsawed on Wednesday hitting a low of Rs 50.25 and high of Rs 56.85, where Rs 3,662 crore worth of stock got traded. Shares finally closed at Rs 55.4, little changed over previous day’s close of Rs 55.6.
Uber is the first major shareholder of Zomato to cash out after the one-year lock up on its pre-IPO shares ended last month. The sale comes close on heels of a 35% bounce in Zomato’s shares of its all-time lows of less than Rs 41 last week. BofA Securities was the sole bookrunner for the deal.
Shares of the company got a boost after it reported strong results for the June 2022 quarter, where the management guided that it expects to achieve a break-even (ex-Blinkit) by March 2023 (outer limit: September 2024) driven by rise in take-rate and cost efficiencies.
“Improvement is not sudden or based on just a quarter’s work – instead it’s the effort from the past). Blinkit loss is likely to be lower than earlier guidance,” Jefferies observed in a note on Tuesday. The brokerage has a ‘buy’ rating on the stock with a price target of Rs 100.
Uber had acquired the stake in Zomato in January 2020 when it sold its India food-delivery business Uber Eats to the company in a non-cash deal. The transaction was valued at Rs 1,376 crore. While Uber’s exit price was 34% below Zomato’s IPO price of Rs 76, it still made about 2.4 times gains on its implied acquisition cost.
Zomato got listed in July 2021. Post-listing, the company had hit a peak market cap of Rs 1.26 trillion ($16 billion), which has currently declined to Rs 43,655 crore ($5.5 billion).
Through its maiden share sale, Zomato had raised Rs 9,000 crore in fresh capital. Only early-stage investor InfoEdge had parted with a small portion of its stake, worth Rs 375 crore, in the IPO.
Zomato doesn’t have any identifiable promoter. The shareholding of its founders and all investors is part of public shareholding. Exit by large marquee investors could weigh on shares of the company, fear market watchers.
China’s Alipay and Antfin held 7.1% and a 6.99% stake, respectively, in Zomato at the end of the June 2022 quarter. InfoEdge’s shareholding stood at 15.17%. Tiger Global’s Internet Fund held 5.11% and Sequoia Capital held 5.1%.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
[ad_2]
Source link
