Japanese technology investor SoftBank Vision Fund is set to sell around 10 crore shares of Zomato, a food and grocery delivery company. This move is expected to represent approximately 1.17% of the stake. The block deal, scheduled for Wednesday, is estimated to be worth about Rs 940 crore, with each share being sold at Rs 94.
SoftBank’s Share Sale and Current Stake in Zomato
As of June 30, SoftBank Vision Fund possessed over 28.71 crore shares in Zomato, equating to a 3.35% stake. The upcoming sale of Zomato shares by SoftBank follows the recent complete exit of Tiger Global, a New York-based investment firm, from the company. On Monday, Tiger Global sold 12.35 crore shares, amounting to 1.44% stake in Zomato, for Rs 1,124 crore.
Stock Performance and Implications
Lock-In Period and Ownership Structure
In August of the previous year, Zomato had issued fresh equity shares to the selling shareholders of Blinkit, a quick commerce platform that Zomato had acquired. This issuance was part of the consideration for the acquisition. Following this transaction, Zomato negotiated a 12-month lock-in period for these shares, exceeding the standard requirement of six months. A significant portion of these shares is owned by venture capital investors including SoftBank Vision Fund, Tiger Global, and Sequoia Capital India (now Peak XV Partners).
Zomato’s Past Issuance and Valuation
Upon Blinkit’s acquisition, Zomato had issued 62.9 crore shares, accounting for a stake of 6.88% on a fully-diluted basis.
Recent Financial Performance and Market Cap
Zomato made headlines by announcing its first quarterly net profit of Rs 2 crore for the April-June quarter, surpassing its guidance. This achievement led brokerage firm ICICI Securities to upgrade Zomato‘s price target from Rs 85 to Rs 120. The positive financial performance propelled Zomato‘s market capitalization past the $10 billion mark. It is worth noting that during its initial public offering in 2021, the valuation of the food and grocery delivery company was $12 billion.
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