Indian fast food delivery major Zomato has raised more than Rs85bn ($1bn) via a qualified institutional placement (QIP), in its first major fundraising following its public listing in 2021.
The company aims to enhance its quick commerce operations amid intense market competition.
The foodtech giant, led by CEO Deepinder Goyal, priced the 336.5 million shares at Rs252.62 each - a 5% discount from the floor price of Rs265.91.
The QIP ran from 25 November to 28 November 2024.
Domestic mutual funds played a significant role in the QIP, with Motilal Oswal’s funds acquiring the largest share.
A total of 69.2 million shares, or 20.81% of the issue, were acquired by Motilal Oswal’s funds.
ICICI Prudential and HDFC’s funds also made substantial investments, acquiring 12.78% and 8.68% of the shares respectively.
Kotak's mutual funds were allocated 6% of the shares, distributed among various schemes.
Zomato CEO Deepinder Goyal wrote in a shareholder letter: “While the business is now generating cash, we believe that we need to enhance our cash balance given the competitive landscape and the much larger scale of our business today.”
A considerable portion of the funds raised, amounting to Rs21.37bn, is earmarked for expanding Zomato’s quick commerce unit, Blinkit.
The investment will support infrastructure development for hyperlocal deliveries.
Following this capital injection, Zomato's cash reserves grew to approximately Rs193bn from Rs108bn, as reported at the end of the second quarter (Q2) of the fiscal year 2025 (FY25).
The company's profit rose by 388.9%, reaching Rs1.76bn compared to Rs360m in the same period of the previous year. Revenue from operations also grew significantly by 68.5% year-on-year.
