Leading online food service player Zomato is likely to seek and approve a fund raise of Rs 8,500 crore, CNBC-TV18 reported cited sources familiar with the development, in an effort to take the domestic shareholding beyond 50%.
CNBC-TV18 quoted sources saying that it is likely the Zomato may apply to the Reserve Bank of India to cap the FII shareholding at 49%.
The current foreign shareholding in Zomato stands at 50.48%, with FIIs holding 45.23% stake in the company. After the proposed fund raise, the foreign shareholding (FPI+FII) in Zomato is likely to fall, said the channel, citing sources.
CNBC-TV18 has written to Zomato seeking a response and the company is yet to revert to the query. Moneycontrol is yet to independently confirm the development.
The food delivery aggregator's board will take up the proposal for fundraise through qualified institutions placement (QIP) on October 22, along with its quarterly results. This would be the first proposal to raise funds by the food delivery giant since its stock market debut in 2021.
The QIP will come at a time when its rival Swiggy is headed for an initial public offering (IPO). There is a high degree of interest in the rationale behind Zomato's fund raise, given that the company is sitting on a high cash balance, even after the acquisition of Paytm's event business in August this year.
Experts on CNBC-TV18 said for any future expansion of Blinkit, the foreign investment regulation could be a concern. Deloitte India's Anil Talreja said this fund raise could add clarity to Zomato's investors, as the companies in the consumption space are looking to grow rapidly given the rising consumer spend. "Growth aspiration seems to be the driver behind the move," said Talreja, adding that any downstream deal in the future by a foreign-controlled entity will be subject to the same regulations relating to FDI.
In the past 12 months, shares of Zomato has risen 138 percent, more than doubling investors' capital. In comparison, Nifty rose 25 percent during this period.
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