Zomato Share Price in Focus: Received Shareholders Approval To Raise Up to Rs 8,500 Crore via QIP

Established in 2010, our technology platform links customers, restaurant partners, and delivery partners to address their various needs. Customers utilize our platform to explore and find restaurants, read and share user-generated reviews, view and upload photos, order food for delivery, reserve tables, and complete payments while dining at restaurants.

Zomato to raise capital via QIP

On November 23, Zomato Ltd., a food delivery aggregator, revealed that its shareholders have given the green light to a plan for raising capital through a Qualified Institutions Placement (QIP). This approval was obtained via a special resolution passed through a postal ballot conducted through remote e-voting. In the previous month, the Zomato board had authorized the company to raise as much as Rs. 8,500 crore through this qualified institution placement. The company stated that this fundraising is intended to enhance its balance sheet at this time, as indicated in a filing.

Zomato reported a decline in its cash reserves by Rs. 1,726 crore from the last quarter, primarily due to the Rs. 2,014 crore deal for acquiring Paytm’s entertainment ticketing business. “Our cash reserves decreased from Rs. 14,400 crore to roughly Rs. 10,800 crore, largely due to covering previous quick commerce losses as well as some equity investments and acquisitions,” the company stated.

Zomato’s business is improving and generating cash

Although the company is currently producing cash (in contrast to its loss-making situation at the time of the IPO), it believes boosting its cash reserves is necessary due to the competitive environment and the significantly larger scale of its operations today.

“We understand that merely having capital doesn’t guarantee victory (as service quality plays a critical role in success), but we want to make sure we are competing on equal terms with our rivals, who are continually securing more funding,” the company stated.

Zomato FDI investment

According to its existing shareholding structure, Zomato’s current foreign ownership is at 50.48%, which includes 5.25% designated as foreign direct investment (FDI) and the remainder categorized as foreign institutional investment (FII).

Zomato share price skyrocketed today

On November 22, Zomato’s share price closed at Rs. 264.15 per share. Today, the stock increased by over 7% and is currently trading at Rs. 283.90, approaching its 52-week high of Rs. 298.25.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.