Zomato has received an overwhelming 99.79% shareholder approval to raise ₹8,500 crore (approximately $1 billion) through a Qualified Institutional Placement (QIP).
The decision follows a postal ballot initiated on October 23, 2024, and the results were disclosed in an exchange filing on November 23.
The QIP will enhance Zomato’s cash reserves, which had dipped to ₹1,726 crore by the end of September 2024 due to a ₹2,048 crore investment in acquiring Paytm’s entertainment ticketing business.
Zomato founder and CEO Deepinder Goyal emphasized that the fundraise aims to strengthen the company’s position in a highly competitive market, particularly as rivals continue to raise significant capital.
Strategic Use of Funds
The company plans to channel much of the proceeds into expanding Blinkit’s dark store network.
Blinkit, Zomato’s quick commerce arm, has been a key driver of its financial performance, contributing to a 389% year-on-year surge in consolidated net profit, which reached ₹176 crore for the September 2024 quarter.
Zomato’s move to bolster its financial position comes amid heightened competition in the quick commerce sector.
Rivals like Swiggy, which operates Instamart, recently raised ₹11,000 crore through IPO, while Zepto secured over $1 billion earlier this year to expand its operations.
Governance and Compliance
Zomato has appointed Morgan Stanley as the lead investment bank for the QIP and is in discussions to onboard additional banks.
In addition to approving the QIP, Zomato’s shareholders also passed resolutions to implement multiple Employee Stock Option Plans (ESOPs) and provide interest-free loans to the Foodie Bay Employees ESOP Trust.
Deepinder Goyal reaffirmed that the funds would not be used for minority investments or acquisitions, reiterating Zomato’s commitment to enhancing service quality and achieving sustainable growth.
