Tiger Global separates from Zomato, exits by selling remaining shares worth Rs 1123 crore.
New Delhi: Big news is coming about food delivery app Zomato. American investor Tiger Global has now exited the company. The company has sold its remaining stake in Zomato. Tiger Global through its VC fund Internet Fund III Pte Ltd has exited online food delivery platform Zomato by selling its entire shareholding for Rs 1,123.85 crore.
Tigal Global sold its remaining stake in Zomato through an open market transaction on August 28, according to information filed with the Bombay Stock Exchange (BSE). The VC firm sold around 12.34 crore shares or 1.44 per cent stake in Zomato at an average price of Rs 91.01 per share. Zomato shares closed at Rs 92.35, up 1.5 per cent on Monday.
The swap deal, JM Financial Institutional Securities said in its recent report, was done by some of the company’s pre-IPO shareholders (VC/PE/Chinese investors) as well as former shareholders of Blinkit, who received it under one share. Zomato stock is likely to be volatile in the near term due to market speculation around a possible exit.
While we cannot predict exactly when (if at all) these shareholders will want to exit, we note that many of them are already sitting on sizeable gains, although a large portion of it remains unrealized, the report said. . Some indications from these investors’ past actions suggest that at least some of them will be eager to book profits after the stock’s recent rally. A substantial portion of Zomato’s shares may become available for trading in the near term.
The report mentions that we strongly suggest long-term investors use these liquidity events to build a sizable position in Zomato, as it not only provides a strong foothold in India’s online food service market, but Blinkit The acquisition is also shaping up to be a tremendously diversified play on online retail. Many pre-IPO and pre-Blinkit investors are sitting on substantial unrealized gains. An analysis of the cost of acquisition of shares owned by Zomato’s pre-IPO and pre-Blinkit shareholders shows that they are currently sitting on a substantial return on their investment, although a large portion of it remains unrealized.