Zomato, the popular food delivery platform, has successfully raised ₹8,500 crore through a Qualified Institutional Placement (QIP) of equity shares. The offer, which opened on November 25 and closed on November 28, was approved by Zomato’s Fund Raising Committee. This capital infusion marks a crucial milestone in the company’s ongoing expansion strategy, particularly in the fast-growing quick commerce sector through its subsidiary, Blinkit.
The QIP involved the issuance of 33.64 crore shares at ₹252.62 per share, representing a 5% discount compared to the floor price of ₹265.91 per share. The pricing reflects investor confidence in Zomato’s recent financial performance, with the company reporting significant growth in its most recent quarterly results. In Q2 FY25, Zomato’s operating revenue surged by 68.5% quarter-on-quarter, reaching ₹4,799 crore, up from ₹2,848 crore during the same period the previous year. The company also reported a net profit of ₹176 crore for the September quarter, marking a 4.8-fold increase compared to the previous year.
The QIP has garnered strong interest from major institutional investors, including large mutual funds like ICICI Prudential and Motilal Oswal. Motilal Oswal, in particular, acquired nearly 6.92 crore shares, making up about 20.81% of the total issue size. This demand from institutional investors signals optimism about Zomato’s future growth and profitability.
Following the announcement of the successful QIP, Zomato’s share price saw a notable rise of 6.8%, reaching ₹282 per share on November 29, 2024. This uptick pushed the company’s market capitalization to approximately ₹2.35 lakh crore (around $28 billion), surpassing its closest competitor, Swiggy, whose market cap stands at ₹90,712 crore (about $10.7 billion).
The newly raised funds are expected to be directed towards strengthening Zomato’s position in the quick commerce segment, where its subsidiary Blinkit holds a dominant 46% market share. This gives Blinkit a significant lead over rivals like Zepto (29% market share) and Swiggy Instamart (25% market share). Zomato’s foray into quick commerce aligns with the growing consumer demand for faster delivery services, and the company is positioning itself to capitalize on this trend.
With this capital boost, Zomato is now well-positioned to expand its operations, enhance customer engagement, and scale up its services. The funds will be used to support the company’s long-term growth objectives, particularly in the competitive food delivery and quick commerce markets.
The success of the QIP is a testament to Zomato’s strategic vision and its ability to attract investor confidence. As the company continues to adapt to changing market dynamics, it has the financial resources to support sustained growth and innovation in the coming years.
