Zomato, the food delivery company, has officially commenced the liquidation process for its Slovakian subsidiary, as disclosed in a stock exchange filing on September 15th.
The subsidiary, as per BSE filings, had a net worth of INR 2.2 lakh. Zomato stated that since the subsidiary was non-operational, its liquidation would not significantly affect the company’s turnover or revenue.
“It may be further noted that Zomato Slovakia is not a material subsidiary of the Company, and the dissolution of Zomato Slovakia will not affect the turnover/revenue of the Company,” the company added.
According to filings, the subsidiary had no active operations and made a contribution of less than 0.0001% to Zomato’s total net worth.
The completion of the process is anticipated to take between 9 to 12 months, pending the necessary approvals.
This action aligns with Zomato’s strategy to scale back operations in smaller markets, redirecting attention towards India. In 2016, the company revealed its intention to withdraw operations from nine countries, including the US, the UK, Brazil, Italy, and Slovakia. Subsequently, it clarified that Italy and Slovakia were not considered focus markets due to the absence of deployed ground teams in these regions.
Read More: Zomato to liquidate Czech subsidiary Lunchtime as part of global downsizing strategy
Earlier this year, the Deepinder Goyal-led firm undertook the liquidation of its subsidiaries in Portugal and New Zealand, according to filings with the stock exchange.
Read More: Zomato’s shares soar as company initiates liquidation of Portugal-based subsidiary
In the first quarter of FY24, the company achieved a noteworthy turnaround, reporting a profit of INR 2 crore, compared to a loss of INR 186 crore during the same period last year. This achievement under the leadership of Deepinder Goyal happened well ahead of the company’s earlier guidance, which projected reaching profitability by Q2 FY24.
Read More: Zomato turns profitable in Q1 FY24, reports INR 2 Cr consolidated PAT
These figures have brought a significant boost of optimism to both Zomato’s investors and the stock market. Many founders and investors now believe that Zomato’s impressive performance will alter the perspective from which foodtech and quick delivery startups are evaluated, potentially persuading more venture capitalists to support them.
Also Read: Bernstein bullish on Zomato, predicts 21.7% gain with new INR 120 price target