Food delivery platform Zomato‘s shareholders have approved the company’s plan to raise INR 8,500 crore via a qualified institutional placement (QIP).
Zomato receives nod from 99.7% shareholders
According to ET, over 99.7% of the shareholders that voted were in favour of the resolution. The company aims to strengthen its balance sheet with the fresh capital. Zomato’s founder and CEO Deepinder Goyal had said earlier, “While the business is now generating cash (vis-a-vis a loss-making business at the time of IPO), we believe that we need to enhance our cash balance given the competitive landscape and the much larger scale of our business today.”
Continue Exploring: Swiggy enters sports, acquires Mumbai team in upcoming World Pickleball League
The company’s CFO Akshant Goyal had pointed out that while the enabling resolution to raise up to INR 8,500 crore was passed by the board, the final size of the fundraise will depend on the market condition and timing of when the QIP is launched.
Zomato holds INR 10,813 Cr cash balance
As of September 30, the company had a cash balance of INR 10,813 crore. The company’s shareholders also approved its plan to set up a trust to implement its employee stock ownership plan (ESOP).
Meanwhile, Zomato’s rivals in the food delivery and quick commerce spaces, Swiggy and Zepto, have also concluded large financing rounds recently. While Swiggy raised INR 4,499 crore through the fresh issue portion of its initial public offering, domestic investors pumped $350 million in 10-minute grocery delivery startup Zepto.
Continue Exploring: Reid & Taylor launches e-commerce site, targets additional sales on Myntra
Further, the food tech giant reported a 68% year-on-year (YoY) increase in its operating revenue for the July-September quarter this year at INR 4,799 crore. It reported a five-fold jump in its net profit for the quarter at INR 176 crore.
