Food delivery platform, Zomato announced on Thursday, October 17, that its board will consider raising funds by issuing equity shares through qualified institutional placement (QIP). The company revealed this in an exchange filing.
Zomato yet to reveal QIP Amount
However, it didn’t disclose how much investment the board will consider. According to INC42, the filing revealed, “… a meeting of the board of directors of the Company is scheduled to be held on Tuesday, October 22, 2024, inter-alia, to consider and approve… raising of funds by issuance of equity shares by way of qualified institutions placement, as may be permitted under applicable laws, subject to such regulatory/statutory approvals, including the notice for the postal ballot for obtaining the shareholders’ approval in this regard….”
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Additionally, the company’s board will review and approve its financials for the September quarter, 2024 on the same day.
Notably, Zomato’s net profit soared to INR 253 crore in Q1 FY25 from INR 2 crore in the same quarter last year. Their operating revenue rose 74% to INR 4,206 crore in the June quarter from INR 2,416 crore in Q1 FY24, due to strong growth from Blinkit.
Flipkart Minutes, BigBasket hinder Zomato’s market growth
As the quick commerce market is highly competitive, Zepto and Swiggy’s Instamart (pre-IPO) are both aiming to grow their market share. The entry of Flipkart Minutes, BigBasket, and JioMart has made the competition even tougher.
This new funding will likely help Zomato expand its ‘going-out’ segment too. Previously in this year, Zomato bought Paytm’s entertainment ticketing business for INR 2,048 crore. The Deepinder Goyal-led company is seeing high demand for event tickets sold exclusively on its platform.
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Zomato’s new ‘District’ for going-out business
Furthermore, Zomato is set to introduce a new app called ‘District’ for its going-out business. To boost its events section, Zomato recently hired Kunal Khambhati, former head of live events and IP at BookMyShow. Industry reports suggest Zomato is also considering relaunching its quick parcel service, Xtreme, to focus on food delivery. Launched in October 2023, Xtreme was initially a logistics service for merchants with its own app.
Meanwhile, the company also experienced leadership changes recently. Co-founder and CPO Akriti Chopra resigned last month, and independent director Gunjan Soni stepped down this month due to increased work commitments.
Closing at INR 270.65 on the BSE, Zomato shares fell 1.3% on Thursday.
