Exclusive: Zomato postpones Board meeting on Blinkit acquisition by a week

Zomato has postponed its board meeting to approve the acquisition of quick commerce company Blinkit by a week as the food delivery unicorn wants to take large shareholders into confidence, according to sources close to developments.

“Although the deal is sure to go through, the top management does not want to take a chance with big investors and institutional shareholders. They want to have a buy-in from everyone before going ahead,” said a source in the know.

Moneycontrol had reported earlier this month that the board was scheduled to meet and sign off the acquisition on June 17.

A query on the matter has been sent to Zomato and this article will be updated when the company responds.

Although the deal discussions earlier valued Blinkit at $700 million, the value of the final deal is expected to come down as it involves a stock swap of a definite number of shares in the ratio of 1:10 where Zomato would get 10 shares of Blinkit for every one of its shares.

In March this year, Zomato had extended a lifeline to cash-strapped Blinkit through a loan of $150 million to Grofers India Private Limited (GIPL). The food delivery company said in its earnings call recently that the entire amount had not been disbursed, and the rest will be given out depending on whether the company needs it.

“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 to invest $400 million cash in quick commerce in India over the next two years,” the listed food tech company had said at the time in a filing with the exchanges.

In August last year, GIPL raised $100 million from Zomato in a round that gave the company a unicorn status. That deal had gone through the process of getting approval from the CCI.

One of the sources said that Zomato will acquire an Indian subsidiary of parent company Grofers International Pte Ltd, which is domiciled in Singapore. The company had shifted its headquarters in 2015 to the South East Asian country which boasted of lighter taxation regulations.

Zomato shares fell 4.55 percent to close at Rs 67 on the BSE on Thursday.