Zomato stock gains 4% as firm to buy additional stake in Blinkit

Shares of Zomato rose nearly 4 per cent in early trade amid a strong market today after the food delivery firm said it would buy local grocery-delivery startup Blinkit for Rs 4,447 crore ($568.16 million) in an all-stock deal.

With this move, the food-delivery firm is planning to take advantage of the booming quick delivery market.

Zomato stock gained 3.7 per cent at Rs 73 today against the previous close of Rs 70.35 on BSE. At 12:00 pm, the stock was trading 6.54 per cent lower at Rs 65.75.

The large-cap stock has risen 8.22 per cent for the last five sessions. The stock has fallen 49 per cent in 2022 and gained 12.81 per cent in a month.

The stock hit a 52-week high of Rs 169.10 on November 16, 2021 and a 52-week low of Rs 50.35 on May 11, 2022.

Total 9.26 lakh shares of the firm changed hands amounting to a turnover of Rs 6.54 crore on BSE. The market cap of the firm stood at Rs 54,643 crore on BSE.

Zomato, backed by China's Ant Group, did not disclose details of the size of the latest stake. Zomato in August acquired over 9% stake in Blinkit for nearly Rs 518 crore ($66.16 million). Earlier this year Zomato said it would invest as much as $400 million in the Indian quick commerce market over the next two years.

SoftBank Group-backed Blinkit was formerly known as Grofers. It rebranded itself late last year as its chief promised to speed up deliveries of everything from groceries to electronics in a burgeoning market dominated by Walmart's Flipkart and Amazon's local unit.

Blinkit operates in over 20 Indian cities, delivering products ranging from milk, eggs, fruits, and vegetables to electronics. As of January, the startup had an annual run rate of gross merchandise value of about $450 million, according to Zomato.

Zomato reported a loss of Rs 360 crore in the fourth quarter ended March 31, 2022 against net loss of Rs 134 crore in the year-ago period. Consolidated revenue from operations climbed 75 per cent to Rs 1,212 crore as against Rs 692 crore in the same quarter last fiscal.