Zomato’s share price falls below INR 50, reaches a new low of INR 46
- ByStartupStory | July 25, 2022
Zomato’s share price reached an all-time low on Monday, falling below the INR 50 mark for the first time since its IPO, dipping as low as INR 46 during the early hours of trade. Zomato’s shares began at INR 51 today (July 25), but immediately fell as trade volume grew and the price fell below INR 50. Before 10 a.m., the shares had reached an all-time low of INR 46.05 per share.
Since its spectacular IPO, Zomato has had a difficult few months on the markets. The company’s stock price dropped by more than 28% in the previous month. Its market capitalization has dropped to INR 36,195 Cr ($4.54 Bn), significantly below its previous private valuation of $5.4 Bn. A series of recent events, beginning with its $570 million acquisition of Blinkit, has resulted in a sharp drop in the company’s share price. Since then, the value of Zomato’s shares has continuously declined.
The Blinkit purchase was further tainted when investors complained to SEBI about Zomato’s late disclosure, which resulted in losses. According to the investors, despite the public speculation, it did not act to confirm or refute the same until the last moment. Zomato may have avoided expressing such at a time when the company is being probed by the Competition Commission of India (CCI) for suspected unfair pricing practices. It has service level agreements (SLAs) in place for food delivery timings, service quality, packaging, and other factors.
“If commission prices rise, Jubilant will consider relocating more of its business from online restaurant sites to the in-house ordering system,” according to a private letter written to the CCI and obtained by Reuters. The company’s finances are also not going well. Zomato lost INR 1,222.5 Cr in FY22, which was 50% greater than INR 816.4 Cr in FY21. Despite this, it has continued to finance other firms and make acquisitions in diverse sectors, raising suspicions among investors.
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