In SoftBank’s Strategic move, a major stakeholder in Zomato is reportedly planning to offload a 1.1% stake in the company through a block deal worth an estimated Rs 1,127.5 crore. The buzz around Indian food delivery giant Zomato continues as reports indicate that Japan’s SoftBank is gearing up for a significant move in the stock market. This development marks the third instance since August that SoftBank has sought to reduce its stake in the online food delivery platform.
SoftBank Strategic Move Block Deal Strategy Unfolds
SoftBank Strategic Move Block Deal Strategy Unfolds1.1 Details of the Block Deal
In a recent update, it has been revealed that SVF Growth (Singapore) Pte, an arm of Japan’s SoftBank Group, executed the the block deal on 8 December. The deal involved the sale of a 1.1% stake in Zomato, with a floor price fixed at Rs 120.50 per share, representing a marginal 1% dip from the stock’s last closing price.
1.2: Strategic Moves by SoftBank
This move by SoftBank comes as part of a strategic shift in its investment portfolio. Having divested a similar stake in Zomato in October and earlier in August this year, SoftBank appears to be realigning its holdings in response to evolving market dynamics and global pressures.
SoftBank’s Ongoing Stake Adjustment
SoftBank’s Ongoing Stake Adjustment2.1 Unlocking Zomato Shares
The venture association with Zomato stems from the platform’s acquisition of Blinkit in August last year. The shares received by SoftBank as a part of this deal were subject to a 12-month lock-in period. With the expiration of this lock-in period in August this year, SoftBank initiated the process of selling its Zomato shares.
2.2 Investor Interest and Previous Sales
This is not the first time Zomato is witnessing a shift in its major stakeholders. Last month, Chinese payments group Alipay sold its entire 3.44% stake in Zomato through block deals. The growing trend of stake adjustments among significant investors suggests a dynamic environment in the online food delivery sector.
Market Response and Zomato’s Performance
Market Response and Zomato’s Performance3.1 Share Price Movements
As the news of potential block deal circulates, Zomato’s share price experienced a 2.44% surge on Thursday, reaching Rs 121.80 per share. The market capitalization of the company currently stands at an impressive Rs 1,06,098.95 crore.
3.2 Financial Snapshot
Zomato’s financials for the September quarter reveal a noteworthy shift. The company reported a net profit of Rs 36 crore, a substantial improvement from the net loss of Rs 251 crore during the same period last year. The revenue for the quarter witnessed a robust 72% YoY increase, reaching Rs 2,848 crore.
SoftBank Strategic Move and Zomato’s Trajectory
In the dynamic landscape of the online food delivery industry, VC decision to trim its stake in Zomato adds an intriguing layer to the ongoing narrative. As investors closely monitor the unfolding block deal, the strategic moves by major stakeholders like Alipay reflect the adaptability required in the ever-evolving tech-driven markets. Zomato, with its remarkable financial turnaround, stands at the intersection of market forces, investor sentiment, and the broader digital economy. The coming days will unveil the extent of SoftBank’s stake adjustment and its implications for Zomato’s future trajectory.
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