Why Are Zomato Shares Tanking Today?

Zomato’s shares were deep in the red on Wednesday on reports that a major shareholder was looking to sell a large stake in the food delivery firm.

What Happened: A subsidiary of China’s Ant Group, Antfin Singapore Holdings, is planning to sell around 2% of its stake (amounting to 17.64 crore shares) in Zomato for ₹2,800 crore through a block deal, according to sources cited by CNBC-Awaaz.

The floor price for this block deal has been set at ₹159.4 per share, representing a 4% discount to Zomato’s current market price.

See Also: Indian Apps Return To Google Play Store After High-Level Intervention: Here’s What Happened

Zomato’s share price had hit a record high on Monday, driven by improving profitability and promising future growth prospects, which positively influenced investor sentiment. Zomato is currently the most valuable new-age tech stock in India, with a market capitalization of ₹1.4 lakh crore.

Zomato’s quick commerce business, Blinkit, which it acquired in 2022, is expected to achieve EBITDA-positive status in the next fiscal year and is seen by investors as a key growth driver for the company.

In the third quarter ended December 31, 2023, Zomato reported a consolidated net profit of ₹138 crore, attributed to the accelerated growth of quick commerce and stable performance of its core business. This marks a significant improvement compared to a consolidated net loss of ₹347 crore in the same quarter of the previous fiscal year.

Price Action: Zomato’s share price was down 2.98% at ₹160.90 on Wednesday. The stock has climbed almost 30% so far this year.

Read Next: India’s Space Sector Reform: 100% FDI Cap Unveiled In Landmark Amendments

Don't miss a beat on the share market. Get real-time updates on top stock movers and trading ideas on Benzinga India Telegram channel.

Posted In: EquitiesNewsAsset SalesMarketsMoversTrading IdeasAnt GroupZomato