Zomato shares on investors' radar after Softbank exit

Citi has a buy call on Zomato with a target price of Rs 145

Zomato shares will be closely tracked by investors following a decline in the previous session after SoftBank sold its remaining stake in the food-delivery platform.

Bulk deals data showed that SVF Growth (Singapore) Pte Ltd, the venture capital fund owned by the Japanese investment giant, sold the remaining 9.35 crore shares for Rs 1,127.5 crore at an average price of Rs 120.5 a share .

Invesco Mutual Fund (MF), Sundaram MF, Edelweiss MF, ICICI Prudential Life Insurance, Goldman Sachs (Singapore), Morgan Stanley Asia Singapore, Societe Generale, BNP Paribas Arbitrage, Copthall Mauritius Investment and Citigroup Global Markets Investment were among those who bought the Zomato stock.

SVF's exit is the second in as many weeks for the Gurugram-based startup. Alipay Singapore Holding Pte Ltd, owned by the Ant Group, exited the company on November 29, selling its entire 3.44 percent stake, 29.6 crore shares.

On October 20, SVF had sold 9.35 crore shares at an average price of Rs 111.2 a share.

Also Read | Zomato shares worth Rs 1,125 crore sold in block deal, Softbank likely seller

On December 8, Zomato shares fell over a percent to close at Rs 120.15 on the National Stock Exchange (NSE). The stock has remained under pressure over the past month following Softbank and Alipay’s moves.

Despite the drop, the stock has gained 100 percent this year, making it a multibagger, as it has doubled investors' money. In the past six months, it stock has rallied over 50 percent, outperforming the benchmark Nifty 50 which has risen 12 percent during the period.

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In November, Citi had a “buy” call to Zomato with a target price of Rs 145. Global brokerage UBS increased its target price on the stock to Rs 150 from Rs 125, citing a near 500 basis points improvement in the food delivery margins and an 860 basis points improvement in overall margins between FY23 to FY26. One basis point is one hundredth of a percentage point.

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