Zomato board approves acquisition of 16.66% stake in Mukunda Foods

The Zomato board on March 15 approved the acquisition of a 16.66 percent stake in Mukunda Foods Private Limited for a cash consideration of Rs 37.5 crore.

The acquisition will be done via a subscription of 13,289 convertible preference shares and 10 equity shares of Mukunda Foods.

Zomato said in a regulatory filing: “Pursuant to Regulation 30 and other applicable provisions of the Listing Regulations read with SEBI circular, we wish to inform you that the  board of directors  of Zomato Limited at its meeting held on March 15, 2022, has approved the acquisition by way of subscription of 13,289  (thirteen thousand two hundred eighty-nine) series B1 compulsorily convertible preference shares and 10 equity shares collectively aggregating to 16.66% of the share capital of Mukunda Foods Private Limited on a fully diluted basis, for an aggregate cash consideration of INR equivalent of $5 million (proposed investment).”

Mukunda Foods is a food robotics company that designs and manufactures smart robotic equipment to automate food preparation for restaurants. Their products enable restaurants to scale rapidly while maintaining consistency in food quality and customer experience across multiple outlets.

Mukunda also helps restaurants become more efficient by reducing manpower cost, wastage, and increasing kitchen throughput. “Our investment will help Mukunda Foods scale faster, help reduce restaurant food prices, expand margins, and enhance customer delight,” Zomato said in the release.

Notably, the proposed investment is subject to fulfillment of certain customary conditions precedent and other terms and conditions agreed under the investment agreement executed between the parties.

At the meeting held on March 15, the Zomato board also granted a loan of up to $150 million to Grofers India Private Limited (GIPL) in one or more tranches and delegated the authority to the senior management of the company to decide the key terms of the loan and execute the definitive documents at a future date.

The interest rate for the loan will be 12 percent per annum or higher with a tenor of not more than one year. This loan will support the capital requirements of GIPL in the near term and is in line with our stated intent of investing up to $400 million cash in quick commerce in India over the next two years.