Food delivery aggregator Zomato has raised Rs 8,500 crore through a Qualified Institutional Placement (QIP), allocating 33.65 crore equity shares at Rs 252.62 per share. This issue price represents a 5 percent discount to the floor price of Rs 265.91.
The QIP, approved by the Fund Raising Committee of Zomato's board, was declared closed on November 28, 2024, after receiving application forms and funds from eligible qualified institutional buyers.
This fundraising effort, the first by Zomato since its initial public offering (IPO) in July 2021, is targeted at strengthening the company’s balance sheet and supporting key growth initiatives, founder Deepinder Goyal had said previously.
A significant portion of the proceeds -- Rs 2,137 crore -- will be directed towards expanding the operations of Zomato’s quick commerce unit Blinkit, particularly through investments in dark stores and warehouses. Additional funds will also be utilised for advertising and marketing as Zomato looks to solidify its position in the food delivery and quick commerce space.
Also read | Jefferies sees opportunity in Zomato's 'District' app; predicts 17% upside
Separately, Zomato’s shares have been included in the National Stock Exchange’s futures and options (F&O) segment starting today, November 29. This move will likely enhance liquidity and provide investors with hedging and speculative trading in the stock. Inclusion in the F&O segment is also a prerequisite for a stock's entry into the Nifty 50 index.
BSE has already decided to include Zomato in its benchmark Sensex index with effect from 23 December. Analysts at JM Financial have noted that Zomato's F&O entry could pave the way for its inclusion in the benchmark index during the March 2025 rebalancing.
Meanwhile, brokerage firm Jefferies has a ‘Buy’ rating on Zomato, setting a target price of Rs 335 per share. The brokerage said that the launch of Zomato’s new 'District' app aims to serve as a one-stop destination for going-out activities over the next decade. The app’s initial focus is on dining-out and ticketing, with plans to expand into other use cases. Jefferies also noted that this market remains supply-constrained, presenting Zomato with a substantial opportunity to capitalise on emerging demands and strengthen its competitive edge.
Zomato share price rose marginally on November 28 to end at Rs 285.2. The stock has surged about 145 percent in the last one year, as Zomato has shown an increase in profitability, taking the market capitalisation to Rs 2.4 lakh crore.
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