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Zomato board to meet on Friday to discuss Blinkit acquisition

The company also said in the filing that it may go ahead with a preferential issue of shares to finance the deal

June 22, 2022 / 10:27 AM IST

In a filing with exchanges late on June 21, Zomato said that its board will meet on Friday (June 24) to discuss a potential acquisition of Blinkit.

Moneycontrol had reported earlier that the board meeting to sign off quick commerce company Blinkit’s acquisition was delayed by a week to make sure that large shareholders are convinced it’s a good deal.

Zomato also said in the filing that it may go ahead with a preferential issue of shares to finance the deal. 

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 on 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.

In August last year, GIPL had 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 competition watchdog.

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 were trading at Rs 66.40 on the BSE, up 0.38 percent, in the initial market hours on Wednesday.

Tags: #Zomato
first published: Jun 22, 2022 10:27 am
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