Zomato raises ₹8,500 crore via QIP at ₹252.62 per share to boost its cash reserves

Bengaluru: Food and grocery delivery company Zomato has lifted ₹8,500 crore through its Qualified Institutional Placement (QIP), allocating 33.64 crore shares to ₹252.62 each, it said in a statement filed with the stock exchanges on Friday.

The price includes a reduction of ₹13.29 per share, or 5% of the floor price of ₹265.91. The show opened on November 25 and closed on November 28.

The proceeds are expected to be used to grow its fast commerce arm, Blinkit, at a time when the sector is seeing a surge in demand, with rivals Swiggy and Zepto simultaneously increasing their cash reserves to stay in the competition.

The Gurugram-based company’s cash balance fell to ₹10,800 crore in September quarter of FY25 from ₹14,400 crores during the launch of an initial public offering (IPO) in 2021, mainly due to funding from past rapid trading losses and some equity investments and acquisitions. The company acquired Paytm’s event ticketing business for ₹2,014 crore in August, an effort to expand its services beyond food and grocery delivery.

Zomato thinks it has to improve your cash flow given the competitive landscape and the much larger size of the company today, he said in a letter to shareholders last month.

“We believe that capital in itself does not give anyone the right to win (and that quality of service is the key factor for success), but we want to make sure that we are on an equal footing with our competitors, who continue to raise additional funds. capital,” said Zomato founder and CEO Deepinder Goyal.

The company, however, clarified that the fundraising aims only to strengthen the balance sheet and will not be used to make any minority investments or acquisitions.

Zomato shares were trading 1.3% lower at ₹282.2 each at the time of publication.

Motilal Oswal, ICICI Prudential and HDFC Mutual Fund were among the entities that were allotted more than 5 per cent of the shares on offer in the issue. Motilal Oswal’s private wealth management arm led a $350 million funding round in Zepto last week.

Its rival Swiggy has been elevated ₹5,085 crore from only anchor investors ahead of its initial public offering (IPO) earlier this month. Another rival, Zepto, secured $350 million in funding from Motilal Oswal’s private wealth management arm last week, aiming to bolster its dark store operations as it prepares for a listing in the public market in FY25.

Mint reported Earlier this week, Zepto’s fundraising, backed by Lightspeed, was done to increase domestic ownership and not because it needed cash, according to co-founder and chief executive Aadit Palicha. “…The financing was done quite frankly to increase national ownership. And that’s exactly what we were able to achieve. We achieved the largest national startup fundraise in Indian history. And we’re moving toward national ownership in the next fiscal year.