Japanese investor SoftBank is preparing to divest its entire holdings in the foodtech giant Zomato over the upcoming months, utilizing open market transactions. This strategic choice comes in the wake of SoftBank’s successful move earlier this week, where it reaped profits exceeding INR 100 Crore through the partial sale of its stake in the company.
According to a report by Moneycontrol, SoftBank is currently in possession of an additional 2.18% stake in Zomato, and the company is actively exploring the option of divesting this particular stake using block deals within the coming months.
At an average base price of INR 94.70 per share, SoftBank, the Japanese investor, successfully sold 10 Crore shares of Zomato. This stands in contrast to their initial acquisition cost of INR 83-85 per share. As a consequence, the per-share gains ranged between INR 10-12.
This move comes after the lock-in period for Blinkit investors concluded. These investors had obtained Zomato shares as a result of the foodtech giant’s acquisition of the quick commerce player. Notably, SoftBank, an investor in Blinkit, acquired a 3.35% stake in Zomato subsequent to the acquisition in the previous year.
As Zomato wasn’t SoftBank’s initial investment, the investor is inclined to not hold onto the stake in the company.
“For SoftBank, Zomato is just a monetary transaction, unlike Delhivery, Paytm or PB Fintech, which it entered as a direct strategic investor. So, it is looking at the deal only from a monetary perspective. It was waiting for Zomato to turn into a profitable bet and now that it has, it will look to exit the company fully as and when it gets opportunities,” the report added, quoting a source.
In August of the previous year, Zomato completed the acquisition of the quick-commerce player for INR 4,447 Crores. The shares obtained were subjected to a 12-month lock-in period. Apart from SoftBank, two additional VC firms, namely Peak XV and Tiger Global, also acquired Zomato shares through the Blinkit acquisition.
On Monday, investment firm Tiger Global concluded its involvement with Zomato by divesting 12.24 Crore shares, representing a 1.44% stake, through open market transactions. The shares were sold by Tiger Global’s Internet Fund III Pte Ltd in several segments, achieving an average share price of INR 91.01. The total value of these transactions, as per BSE bulk deal data, amounted to INR 1,123.84 Crores.
In the first quarter of the fiscal year 2023-24, Zomato recorded a consolidated profit after tax (PAT) of INR 2 Crore, marking a significant improvement from the net loss of INR 186 Crore reported in the same quarter of the previous fiscal year.
In the first quarter of the fiscal year 2023-24, the gross order value (GOV) of Zomato’s food delivery business amounted to INR 7,318 Crore, demonstrating growth compared to the INR 6,425 Crore recorded in the corresponding quarter of the previous fiscal year.