Zomato shares drops after Rs 1,040 crore block deal. Full details

Shares of Zomato fell about 2 per cent in Friday's trade as a total of 9,35,69,368 or 9.35 crore shares changed hands worth Rs 1,040.49 crore on the counter via block deal. While the seller could not be ascertained immediately, a media report had earlier suggested that the Japan-based multinational investment holding firm SoftBank, through its affiliate SVF Growth Singapore Pte, intended to sell 1.1 per cent stake in the online food delivery platform via today.

As per the block deal data, the deal price was Rs 111.20 per share, down 0.40 per cent over the previous closing price.

As per an earlier report by CNBC-TV 18, the offer price was seen in the range of Rs 109.40 to Rs 111.65 per share, suggesting a discount of up to 2 per cen to Thursday's closing price. The offer size could be about Rs 1,020 crore, the report had suggested earlier.

SVF Growth (Singapore) Pte Ltd owned 18,71,38,736 shares, or 2.17 per cent take, in Zomato as on September 30, shareholding data available with stock exchanges suggest. Other prominent shareholders in Zomato included Antfin Singapore Holding Pte (55,02,50,900 shares or 6.51 per cent), Alipay Singapore Holding (29,60,73,993 shares or 3.44 per cent) and Kuwait Investment Authority Fund 601 (8,79,38,059 shares or 1.02 per cent stake, BSE data shoqed.

Earlier this month, ICICI Securities in a note on Zomato said: "We believe the quick commerce business could turn contribution positive (full quarter basis) by Q2FY24E and profitable at the adjusted Ebitda level by Q1FY25. In our view, the quick commerce business could improve adjusted Ebitda (as percentage of GOV) by 620 bps over the next four quarters led primarily by: scale benefits on corporate overheads (210 bps), decrease in other fulfilment cost (180 bps), mix improvement (110 bps) and increase in ad revenues."

This domestic brokerage suggested a target of Rs 200 per share on Zomato in its bull case scenario. It suggested a target of Rs 70 in its bear case scenario, implying a risk reward skew of 2.6:1 towards the upside.

"This re-inforces our view that Zomato remains a buy despite the 120 per cent re-rating from all-time lows," it said.

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