SoftBank, a prominent technology investor from Japan, is preparing to divest a 1.17% ownership share in the Indian foodtech leader Zomato, with the transaction expected to yield a minimum of INR 940 Crores.
According to the agreement’s conditions, an affiliate of the investment company, SVF Growth Singapore, intends to sell 10 crore shares of Zomato at a base price of INR 94 per share, as reported by CNBC. This value signifies an approximate 0.7% reduction compared to Zomato’s closing stock price on August 29th.
According to the report, Kotak Securities has been appointed as the exclusive book runner for this transaction. This development follows recent reports indicating that the technology investor was exploring the possibility of divesting additional shares of the foodtech powerhouse through block deals.
This sequence of events comes after the conclusion of the lock-in timeframe for Blinkit investors. These investors had received Zomato shares as a result of Zomato’s acquisition of Blinkit, which occurred on August 25. Following this acquisition in the previous year, SoftBank, one of the investors in Blinkit, secured a 3.35% ownership in Zomato.
Even considering the minimum price of INR 94, SoftBank is poised to generate substantial gains, given that the calculated worth of the Zomato shares it obtained from the Blinkit agreement was INR 70.76 per share.
This marks the second instance of a notable Zomato investor divesting their share in the foodtech behemoth. Just the day prior, Tiger Global, a hedge fund headquartered in the United States, concluded its involvement with Zomato by offloading a 1.44% stake through open market transactions, yielding INR 1,123 Crores.
Read More: Tiger Global exits Zomato, sells 12.24 Cr shares for INR 1,123 Cr in open market transaction
Since commencing operations in Mumbai in late 2018, the Japanese technology investor has successfully executed exits totaling $5.5 billion from its portfolio in India. Out of this sum, exits amounting to $1.5 billion have been accomplished within the last 12 to 18 months.
This recent advancement occurs against the backdrop of significant share offloading by prominent global investment firms in emerging tech startups. This trend has emerged due to the surge in stock values this year, attributed to shifts in investor sentiment.
Before this incident, Tencent, a tech investor from China, divested 2.1% of its ownership share in PB Fintech, which oversees Policybazaar and Paisabazaar, for a sum of INR 562 Crores ($68 million). Furthermore, Ant Group, a major Chinese internet player, recently relinquished a 3.6% stake in fintech leader Paytm for INR 2,037 Crores through a series of block transactions earlier in the current month.
Meanwhile, Zomato’s shares have been experiencing an increase on the stock market due to its enhanced financial performance. The prominent foodtech company disclosed a net profit of INR 2 Crores in the June quarter of 2023. In terms of year-to-date (YTD) performance, Zomato’s shares have surged by 59.70%.
On Tuesday (August 29), Zomato’s shares concluded the trading session at INR 94.65, marking a 2.51% increase on the BSE.