Zomato dips 6% as board approves acquisition of Blinkit for Rs 4,447 crore

Zomato-Blinkit deal: This transaction will be carried out through issuance and allotment of up to 628.5 million fully paid-up equity shares of Zomato at a price of Rs 70.76 per equity share

Shares of Zomato dipped 6 per cent to Rs 66.50 on the National Stock Exchange (NSE) in Monday's intra-day trade, after the company's board approved the acquisition of quick-commerce company Blinkit for Rs 4,447 crore (around $567 million) in an all-stock deal. Food aggregator platform Zomato will be acquiring 33,018 equity shares of Blink Commerce Pvt Ltd (BCPL).

At 10:40 AM, Zomato was 4.5 per cent lower at Rs 67.35, as compared to 1 per cent gain in the Nifty50 index. A combined 55 million equity shares have changed hands on the NSE and BSE. However, despite today's fall, the stock has outperformed the market during the past one month by gaining 8 per cent as against 3 per cent decline in the Nifty50 index.

Over the past six months, though, the stock price of Zomato has tanked 49 per cent, as against a 7 per cent fall in the benchmark index. It has corrected 61 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. The stock had hit a record low of Rs 50.35 on May 11, 2022.

Zomato said the acquisition is in line with the company's strategy of investing in the quick commerce business. This transaction will be carried out through issuance and allotment of up to 628.5 million fully paid-up equity shares of Zomato, having face value of Rs 1 each at a price of Rs 70.76 per equity share.

The transaction is expected to close in early August. The transaction is subject to shareholders’ and stock exchange nod.

BCPL owns and operates a mobile and web application based information technology business platform which acts as a facilitator between third party sellers of various products (such as grocery, fruits and vegetables, bakery items, personal care, health and hygiene, pet care and baby care and potential buyer of goods.

It also provides support services to merchants in relation to sales made on the platform by the merchants, including warehousing, logistics, order fulfilment, payment collection and other services and advertisement services for brands.