Zomato gains 6% after over 55 mn shares change hands via block deals

At 09:15 AM; on the NSE around 31.98 million shares representing 0.39% of total equity of Zomato, while on the BSE, around 26.5 million shares or 0.31% stake of the company changed hands.

Shares of Zomato rallied 6 per cent to Rs 96 on the BSE in Monday’s intra-day trade after over 55 million shares of the online food ordering and delivery platform company changed hands on the bourses via block deals.

At 09:15 AM; around 31.98 million shares representing 0.39 per cent of total equity of Zomato changed hands on the National Stock Exchange (NSE), the exchange data shows. On BSE, around 26.5 million shares or 0.31 per cent stake of the company changed hands via block deal.

The names of the buyer and sellers were not ascertained immediately.

According to CNBC-TV18 reports, Japanese tech giant SoftBank was likely to offload Zomato shares soon as the lock-in for the post-Blinkit deal ends today.

Zomato issued fresh equity shares to all the selling shareholders of Blinkit as consideration for the M&A last year. Following the transaction, Zomato had negotiated a 12-month lock-in for these shares, compared to the statutory lock-in requirement of six months. A majority of these shares are owned by just three venture capital investors, namely, Softbank, Tiger Global and Sequioa.

Meanwhile, thus far in the calendar year 2023, the stock price of Zomato has appreciated by 55 per cent, as compared to 6 per cent rise in the S&P BSE Sensex. The stock had hit a 52-week high of Rs 102.85 on August 7, 2023.

Zomato had turned profitable for the first-time ever in the June quarter of 2023-24 (Q1FY24). Food aggregator platform company, Zomato reported a consolidated profit after tax of Rs 2 crore compared to a loss of Rs 186 crore in the year-ago period. Revenue from operations grew 71 per cent year-on-year to Rs 2,416 crore in Q1FY24, up from Rs 1,414 crore in the corresponding period a year ago.

Zomato’s adjusted earnings before interest, tax, depreciation, and amortisation (Ebitda), including its quick commerce business Blinkit, turned positive for the first time ever at Rs 12 crore, compared with a loss of Rs 175 crore in the previous quarter (Q4FY23).

The food delivery business is still in a nascent stage in India with a long runway for growth. With a dominant market share and strong growth in the food delivery business and Hyperpure, we expect Zomato to report a strong 43 per cent adjusted revenue CAGR over FY23-25, analysts at Motilal Oswal Financial Services said.

The brokerage firm in its result update said it now estimates Zomato to turn positive on reported EBITDA by 4QFY24, and deliver c5 per cent EBITDA margin in FY25, which should further drive profitability.