Zomato board to consider acquisition proposals on June 24; stock gains 4%

Shares of food delivery firm Zomato rallied 4 per cent to Rs 68.60 on the BSE in Wednesday’s intra-day trade, thus gaining 5.5 per cent in the last two trading days, after the company said its board will meet on Friday, June 24, to consider a proposed acquisition.

"The meeting of the board of directors of the company is scheduled on June 24 to consider a potential acquisition transaction by the company, the consideration for the same may be discharged through issuance of equity shares on preferential basis," Zomato said in an exchange filing on Tuesday after market hours.

According to a Business Standard report, Zomato may acquire quick commerce player Blinkit. If the deal goes through, it will not only give Japanese investor SoftBank shares in Zomato, but also allow it to make some money from the investments it has made in Blinkit, the newspaper reported on June 9, 2022, quoting sources in the know.

In the past one month, Zomato has outperformed the market by gaining as much as 16 per cent, as compared to a 4 per cent decline in the S&P BSE Sensex. The stock had hit a 52-week low of Rs 50.35 on May 11, 2022.

However, in the past six months, the stock price of Zomato has more-than-halved or tanked 51 per cent, as against a 8 per cent fall in the Sensex. It has corrected 59 per cent from its record high of Rs 169 touched on November 16, 2021. In July last year, Zomato had raised Rs 9,375 crore through initial public offer (IPO) by issuing shares at price of Rs 76 per share.

Meanwhile, for the fiscal year 2022, losses of the company came in at Rs 1,223 crore, compared to Rs 816 in the previous year. Revenue increased to Rs 4,192 crore from Rs 1,994 crore. The increase in fuel prices does increase Zomato’s delivery cost.