Zomato Shares Recover After 10% Drop on Multiple Block Deal Reports

In Wednesday's opening trades on the BSE, shares of Zomato Ltd fell as much as 10% after an unnamed stakeholder proposed to sell 612 million shares at a discount.

An unidentified shareholder offered to sell 612 million shares at a discount, a stake matching that held by Uber Technologies, which, according to data compiled by Bloomberg, owns 612.2 million shares in Zomato. As a result, shares of Zomato Ltd. fell as much as 10% on the BSE in Wednesday's opening deals. However, as the session went on, the stock recovered the majority of its losses.

Although the seller's identity was not disclosed, CNBC TV18 stated that it is most likely Uber BV, which also owns a 7.8% interest in Zomato. The price range for the transaction would be Rs 48–54 per share, which represents a discount of 2.8%–13.6% from the price in the open market.

As of 9.35 am, 66.58 crore equity shares of Zomato worth Rs 3,377.23 crore were exchanged, according to data from BSE. On the National Stock Exchange (NSE), 17.96 crore shares worth Rs 974.66 crore changed hands, according to the data.

Following the news, Zomato's shares fell by 10% to Rs. 50.25 on Wednesday before climbing back to Rs. 54.35 at 9:35 a.m. The stock reached its 20% upper circuit on Tuesday before settling at Rs 55.60.

The total amount to be obtained through the sale is Rs 2,939 crore at the low end of the range, which represents a 13.6% discount to Tuesday's close.

The information comes as Zomato stock surged nearly 20% on Tuesday after the online meal delivery service announced that its consolidated net loss shrunk in the June quarter. As opposed to a loss of Rs 361 crore in Q1FY22, the food technology player reported a consolidated loss of Rs 186 crore for the quarter ended June 30, 2022. The quarter's revenue increased 68% year over year to Rs 1,414 crore.

In the quarter under review, the adjusted EBITDA loss decreased from Rs 220 crore (-15%) of adjusted revenue in the prior quarter to Rs 150 crore (-8% of adjusted revenue).

Zomato's operational income, which is primarily derived from its core business of meal delivery and related fees it charges eateries for using its platform, increased 67% to Rs 1,414 crore in the June quarter from Rs 844 crore a year earlier.

The food delivery company Zomato Ltd., which went public last year, is appointing chief executive officers (CEOs) to at least four of its core business areas. After receiving approval to purchase another delivery startup, Zomato Ltd. plans to call itself Eternal Ltd.