3.4% of Zomato stake changes hands in block deals as Alibaba sells shares
Restaurant aggregator and food delivery unicorn Zomato saw multiple bunch trades on November 30 morning, with 27.36 crore shares changing hands at an average price of Rs 64 apiece.
While the buyers were not known, Bloomberg reported that Alipay Singapore sold more than 26 crore shares and raised $200 million.
At 930 am, the stock was quoting at Rs 63.70 and was trading flat on the National Stock Exchange. It was the most active stock on the exchange with a trading volume of 341,558,894.
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On November 29, sources told CNBC-Awaaz that Alibaba, which owns about 13 percent stake in Zomato, was looking pare its stake to 10 percent by selling shares worth $200 million through its two subsidiaries, Ant Financial and Alipay.
Alibaba’s partial exit comes at a time when Zomato has seen a series of senior-level exits recently. The company has also initiated layoffs as it plans to shrink the workforce by 4 percent.
Foreign brokerage firm Jefferies, however, is not too bothered by the departure of co-founder Mohit Gupta. “While we are unsure of the potential impact of Mohit's departure on the business, in our interactions, we find Deepinder in control of the business and hence do not see a big disruption or a major change in strategy,” said Vivek Maheshwari, equity analyst at Jefferies.
Zomato’s share price has fallen over 55 percent this year, even as the company witnessed sharp revenue growth in recent quarters. In Q2FY23, its consolidated net loss narrowed to Rs 250.8 crore against Rs 434.9 crore registered in the same quarter of the previous. Its revenue from operations zoomed 62.20 percent YoY to Rs 1,661.3 crore from Rs 1,024.2 crore.
Jefferies has a target of Rs 100 on Zomato. Morgan Stanley is "overweight" with the target at Rs 80. ICICI Securities rates the stock "hold" with a target price of Rs 65.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.