Shares of Zomato Ltd are in the spotlight today as Antfin Singapore Holdings, a subsidiary of China’s Ant Group, is reportedly looking to offload a 1.54% stake in the Indian food delivery platform via a block deal.
The proposed sale, valued at ₹3,420 crore ($408 million), is expected to be executed at a floor price of ₹251.68 per share, representing a 4.39% discount to Monday’s closing price of ₹263.24 on the National Stock Exchange (NSE).
Block Deal Details
- Floor price: ₹251.68 per share
- Deal size: ₹3,420 crore ($408 million)
- Discount to Monday’s closing price: 4.39%
- Stake being sold: 1.54%
- Managing banks: Goldman Sachs and Morgan Stanley
Antfin Singapore Holdings’ Stake in Zomato
As of the June quarter, Antfin Singapore Holdings held 37,38,55,225 shares, representing a 4.30% stake in Zomato. This is not the first time the company has sold a stake in Zomato; in March, it offloaded a 2.1% stake at ₹160 per share, worth $341.50 million.
Analyst Views
Foreign brokerage UBS has maintained its ‘Buy’ call on Zomato, increasing its target price to ₹320 from ₹260. Morgan Stanley has also maintained an ‘Overweight’ stance on the stock, with a target price of ₹278.
Elara Securities noted that Zomato’s food delivery segment reported a 30% year-on-year (YoY) adjusted revenue growth in Q1FY25, outpacing the 23% YoY revenue growth reported by US-based food ordering and delivery platform DoorDash in Q2CY24.
Key Takeaways
- Zomato’s shares hit a record high of ₹280 on Monday
- The company’s growing ad revenue is a key driver of overall revenue and margin growth
- Zomato’s strategy aligns with DoorDash’s, focusing on driving higher ad revenue, frequency, user experience, and expansion into non-food segments