Zomato shares drop following massive block deals, with Uber presumably the seller

  • Aug. 3, 2022, 1:33 p.m.

Shares of Zomato Ltd declined as much as 10% on the BSE in Wednesday's opening deals as an undisclosed shareholder offered to sell 612 million shares at a discount, a stake matching that held by Uber Technologies, which owns 612.2 million shares in Zomato, according to data compiled by Bloomberg.

The selling shareholder in the block trade offered the stock at between ₹48-54 a piece, according to terms of the deal seen by Bloomberg News late Tuesday, which is at over 13% discount versus the last closing price. BofA Securities is the sole bookrunner of the block trade. The term sheet did not name the potential seller. Uber is the likely seller of a 7.8% stake in Zomato being disposed of via a $373 million block deal, a source told Reuters on Tuesday.

Zomato shares jumped the most since its debut session last year on Tuesday, as a number of block trades changed hands after it released its quarterly performance report. The result showed a smaller-than-expected loss and revenue in line with analyst expectations.

Its consolidated net loss in the first quarter of the current financial year almost halved to 186 crore due to higher income. The company had reported a net loss of 360.7 crore in the year-ago period.

During the quarter under review, consolidated revenue from operations rose 16% to 1,414 crore from 1,212 crore in the March quarter and 67% from 844 crore a year ago. This was driven by a 10% sequential jump in its gross order value (GOV) to 6,430 crore in Q1FY23, which was led by order volumes and a mild growth in average order values.

In a letter to shareholders, Deepinder Goyal, Managing Director & Chief Executive Officer, informed that there is no plan to make any more minority investments as the company is in cash conservation mode and is busy executing what it already has on its plates right now.

Zomato Ltd., the food-delivery company that went public last year, is appointing chief executive officers (CEOs) to at least four units to lead its key business units and plans to rename itself Eternal Ltd. after winning approval to acquire another delivery startup.

Author : Rajdhani Delhi Representative

Rajdhani delhi representative

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