Zomato, the popular food delivery giant, witnessed a significant development as a block deal involving 1.17 percent equity took place on August 30, resulting in the opening of Zomato's shares with a more than 5 percent surge. This transaction involved the exchange of approximately 10 crore shares, constituting a 1.17 percent stake, at an average price of Rs 94.70 each. The total value of this deal was approximately Rs 947 crore. The buyers and sellers involved in this transaction are yet to be identified, but there are indications that SoftBank, through its venture capital fund SoftBank Vision Fund, might have sold a portion of its stake in Zomato. SoftBank holds a 3.35 percent stake in Zomato, and this stake sale aligns with its strategy to reduce its holdings in the food delivery platform.
Notably, this stake sale by SoftBank comes shortly after Tiger Global Management, another foreign institutional investor, completely divested its shareholding of 1.44 percent in Zomato on August 28. This deal resulted in Tiger Global earning a substantial Rs 1,123.85 crore. Meanwhile, Zomato itself has been taking steps to enhance its profitability. The company has decided to implement a platform fee of Rs 2, regardless of the total cart value, a move that has been positively received by the market.
Foreign brokerage firm Morgan Stanley has expressed optimism about Zomato's platform fee approach, recognizing its potential to significantly boost the company's profitability. Morgan Stanley remains "overweight" on Zomato and has set a price target of Rs 115 for the stock. Additionally, HSBC has raised its price target for Zomato by almost 18 percent to Rs 120, maintaining a "buy" recommendation. HSBC underscores Zomato's exploration into hyperlocal services and its subsidiary Blinkit, which holds a current valuation of $5 billion. This venture into hyperlocal services is expected to contribute significantly to Zomato's long-term growth prospects, as it holds the potential to evolve into a substantial business avenue for the company.
As of now, Zomato's strategic initiatives and stake movements by significant investors are drawing attention, making it a notable player in the ever-evolving landscape of food delivery and hyperlocal services.
