Zomato Stake Worth Rs 2,827 Cr Sold by Antfin Singapore

In a major development in the Indian online food delivery market, Antfin Singapore Holding, an affiliate of Alibaba’s Ant Financial Group, has reduced its stake in Zomato by selling 2% of its shares for Rs 2,827 crore in the open market. The deal was executed on March 6, 2024, according to the bulk deals data on BSE. Antfin Singapore Holding had held 6.32% stake in Zomato as of December 2023, making it one of the largest investors in the company.

The buyer of the shares was Morgan Stanley Asia Singapore Pte, which acquired 0.65% stake in Zomato for Rs 909.55 crore at an average price of Rs 160.1 per share. This is not the first time that Morgan Stanley has shown interest in Zomato. In November 2023, it had bought a part of the 3.4% stake that Antfin Singapore had sold for over Rs 3,300 crore to various foreign investors, including Fidelity, the Government of Singapore, Franklin Templeton MF, BofA Securities, Societe Generale, and Vanguard.

The stake sale by Antfin Singapore comes amid the regulatory uncertainties faced by Chinese investors in India due to the border tensions between the two countries. The Indian government has tightened the norms for foreign direct investment (FDI) from China and other neighbouring countries, requiring prior approval for any investment in Indian companies. This has affected the plans of several Chinese investors, including Ant Group, Tencent, and Alibaba, who have backed many Indian startups in sectors such as e-commerce, fintech, edtech, and gaming.

Zomato, however, has continued to perform well in the market, reporting its third consecutive quarter of profits in December 2023. The company’s revenue from operations surged 69% year-on-year to Rs 3,288 crore in the quarter ended December 2023, while its net profit stood at Rs 138 crore, compared to a net loss of Rs 347 crore in the same period a year ago. The company attributed its strong performance to the recovery in the food delivery business post the lockdowns imposed due to the Covid-19 pandemic, as well as the growth in its quick commerce segment that offers delivery of groceries, medicines, and other essentials within minutes.

Zomato’s share price has also risen by over 200% in the last one year, reflecting the strong growth prospects of its food delivery and quick commerce businesses. The company has also expanded its presence in new segments such as grocery delivery, online pharmacy, and nutraceuticals. Zomato competes with Swiggy, Amazon Food, and Dunzo in the food delivery and quick commerce space in India.

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