Uber sells entire stake in Zomato; pockets Rs 3,088 cr, makes 2.4x returns


US ride-hailing giant on Wednesday sold its entire 7.78% stake as part of a block deal in domestic food-delivery company to pocket Rs 3,088 crore ($390 million). A total of 612 million shares were sold at Rs 50.44 apiece to over a dozen institutional investors. Fidelity Investment Trust Fidelity Series Emerging Fund bought 54.4 million shares worth Rs 274 crore and ICICI Prudential Mutual Fund bought 45 million shares worth Rs 226 crore, showed block deal data.

Shares of got whipsawed on Wednesday hitting a low of Rs 50.25 and high of Rs 56.85, where Rs 3,662 crore worth of stock got traded. Shares finally closed at Rs 55.4, little changed over previous day’s close of Rs 55.6.

is the first major shareholder of to cash out after the one-year lock up on its pre-IPO shares ended last month. The sale comes close on heels of a 35% bounce in Zomato’s shares of its all-time lows of less than Rs 41 last week. BofA Securities was the sole bookrunner for the deal.

Shares of the company got a boost after it reported strong results for the June 2022 quarter, where the management guided that it expects to achieve a break-even (ex-Blinkit) by March 2023 (outer limit: September 2024) driven by rise in take-rate and cost efficiencies.

“Improvement is not sudden or based on just a quarter’s work – instead it’s the effort from the past). Blinkit loss is likely to be lower than earlier guidance,” Jefferies observed in a note on Tuesday. The brokerage has a ‘buy’ rating on the stock with a price target of Rs 100.

had acquired the stake in Zomato in January 2020 when it sold its India food-delivery business Uber Eats to the company in a non-cash deal. The transaction was valued at Rs 1,376 crore. While Uber’s exit price was 34% below Zomato’s IPO price of Rs 76, it still made about 2.4 times gains on its implied acquisition cost.

Zomato got listed in July 2021. Post-listing, the company had hit a peak market cap of Rs 1.26 trillion ($16 billion), which has currently declined to Rs 43,655 crore ($5.5 billion).

Through its maiden share sale, Zomato had raised Rs 9,000 crore in fresh capital. Only early-stage investor InfoEdge had parted with a small portion of its stake, worth Rs 375 crore, in the IPO.

Zomato doesn’t have any identifiable promoter. The shareholding of its founders and all investors is part of public shareholding. Exit by large marquee investors could weigh on shares of the company, fear market watchers.

China’s Alipay and Antfin held 7.1% and a 6.99% stake, respectively, in Zomato at the end of the June 2022 quarter. InfoEdge’s shareholding stood at 15.17%. Tiger Global’s Internet Fund held 5.11% and Sequoia Capital held 5.1%.

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