Zomato-Blinkit deal gets green signal
- ByStartupStory | July 28, 2022
According to records published on the BSE, Zomato’s investors voted in favor of the business’s purchase of rapid commerce grocery startup Blinkit (previously Grofers) on Monday. Approximately 97 percent of all voters supported Zomato’s acquisition of Blinkit (previously Grofers) in an all-stock deal for 4,447 crores ($570 million). While 14.6 percent of public institutions opted against the agreement, 99 percent of public non-institutions did.
Zomato’s shares moved in the green after the permission was announced to the stock exchange on Wednesday, ending the session up 5.52 percent at Rs 43.95 per share. The stock price had plummeted in the previous two trading days, falling about 11% on Monday and then 14% on Tuesday in intraday trade after the obligatory lock-in period for pre-IPO stockholders ended on Saturday. In addition, according to a BSE statement, Zomato allocated 4.6 lakh equity shares out of its Esop (employee stock option plan) pool on Tuesday at an exercise price of one rupee.
Last year, in July, the Gurugram-based firm had a spectacular debut on the Indian stock markets, and its shares more than quadrupled to an all-time peak of Rs 169.10 on Nov 16, 2021. Since then, its stock price has dropped by over 70%. Meanwhile, brokerage firm Jefferies holds out hope for the company, believing that Zomato’s management has hastened its path to stronger unit economics. The stock has a targeted price of Rs 100, implying a 125 percent potential.“Despite management guidance on the break-even in food delivery, shareholders are not providing many benefits of the doubt,” Jefferies stated in research. “The darkest part of the night is shortly before dawn.
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