Zomato, the foodtech giant, has received approval from the Indonesian government to liquidate its subsidiary in the Southeast Asian country.
According to a regulatory filing, the company announced that it obtained the final decree from Indonesia’s Ministry of Law on April 29, approving the liquidation of Zomato Media Indonesia.
The company stated, “We would like to inform that on April 29, 2024, the Indonesian Ministry of Law issued a final decree letter approving the liquidation of PT. Zomato Media Indonesia (“PTZMI”), a wholly owned subsidiary of Zomato Limited with effect from March 21, 2024.”
The approval comes a year after the company initiated the liquidation process of the subsidiary. According to Zomato’s red herring prospectus filed in July 2021, the Indonesian arm did not have active business operations.
Continue Exploring: Zomato’s Indonesian subsidiary PTZMI starts liquidation process, no significant impact expected on turnover
In the same document, Zomato stated that PTZMI’s net worth stood at approximately INR 1.5 Cr, constituting a mere 0.01% of its overall net worth.
The foodtech giant ventured into Indonesia nearly a decade ago, in 2013. Nonetheless, it seems to have struggled to gain traction in the country. The decisive setback occurred in late-2020 amidst the Covid-19 pandemic, prompting the company to terminate all its employees in Indonesia.
In February last year, the company officially ceased its operations in Indonesia. Subsequently, its websites for the country began displaying a message confirming the shutdown of its foodtech services there.
This development comes at a time when Zomato has been actively dissolving its foreign subsidiaries. In February this year, it announced the completion of the liquidation of its subsidiaries in Vietnam and the Czech Republic.
In January, the company also initiated the process of dissolving its Polish step-down subsidiary, Gastronauci SP. Z.O.O. Since 2021, it has liquidated subsidiaries in Slovakia, the Czech Republic, the US, the UK, Ireland, New Zealand, Canada, Australia, Jordan, and Qatar.
Continue Exploring: Zomato continues streamlining operations: Completes liquidation of subsidiaries in Vietnam and Czech Republic
While the exact reason remains undisclosed, the spree of shutdowns likely originated from the company’s efforts to streamline operations and close unprofitable subsidiaries that contributed little to its overall revenue.
Nevertheless, it has intensified its focus on its presence in India and has introduced numerous new offerings and pilot programs in the past month. These include an all-electric large order fleet, a ‘Pure Veg’ fleet, last-mile delivery services for office workers within corporate parks, as well as priority deliveries in select areas of Bengaluru and Mumbai.
Continue Exploring: Zomato launches all-electric ‘large order fleet’ for events and gatherings
In terms of finances, the foodtech giant maintains robust profit and revenue growth. Zomato saw its net profit increase more than fourfold sequentially to INR 138 Cr in the quarter ending December 2023. Similarly, its operating revenue surged over 15% quarter-on-quarter (QoQ) to INR 3,288 Cr in Q3 FY24.
Building on this momentum, Zomato’s shares have soared almost 200% in the last 12 months, with the stock rising over 56% year-to-date (YTD). Recently, Goldman Sachs raised its price target (PT) on the stock by more than 40%, increasing it from INR 170 to INR 240.
Zomato’s shares closed yesterday’s trading session down by 0.28% at INR 193.05 on the BSE.
Continue Exploring: ICICI Securities raises Zomato’s price target to INR 300, citing strong growth and profitability metrics
