Zomato shareholders approve Rs 8,500 crore fundraise through QIP

Food delivery aggregator Zomato on Saturday announced that its shareholders have approved its proposal to raise capital through a qualified institutional placement (QIP). Approval was obtained by special resolution adopted by mail ballot conducted via remote electronic voting.

Last month, Zomato’s board approved a proposal to raise up to Rs 8,500 crore through qualified institutional placement (QIP). The company said the funds are intended to strengthen its balance sheet at this stage.

Zomato also reported a decline in its cash balance of Rs 1,726 crore compared to the previous quarter, mainly due to the Rs 2,014 crore deal to acquire Paytm’s entertainment ticketing business.

“Our cash balance has declined from Rs 14,400 crore to approximately Rs 10,800 crore (mainly due to funding of past rapid business losses as well as some equity investments and acquisitions),” it said.

While the business is currently generating cash compared to being unprofitable at the time of the IPO, the company believes it is critical to strengthen its cash balance sheet in light of increasing competition and the significantly larger scale of operations today.

“We believe that capital alone does not entitle anyone to win (and that quality of service is a key determinant of success), but we want to ensure that we are on a level playing field with our competitors who continue to raise additional funds. capital,” the statement says.

The food delivery aggregator confirmed that its quick-commerce business is operating close to adjusted EBITDA, while the profitability of its food delivery business remains stable. The company also clarified that it currently has no plans for minority investments or acquisitions.

As per the current shareholder structure, Zomato’s foreign ownership is 50.48%, with 5.25% classified as foreign direct investment (FDI) and the rest classified as foreign institutional investors (FII).

Zomato Ltd shares closed at Rs 264.15 on Friday, down Rs 2.60 or 0.97 per cent on the BSE.

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