According to block sale data, venture capital firm Moore Strategic Ventures has sold its entire holding in Zomato of 4.25 Cr shares at INR 44 apiece.
Moore sold its holdings in Zomato at INR 187 Cr; the VC firm had bought the holdings in the form of 6,347 compulsorily convertible Series G shares from Nexus Ventures in January 2021 for INR 191 Cr. Therefore, Moore ended up booking a loss of INR 4 Cr on its investment in Zomato.
The move comes amid a bad few days for the listed foodtech startup on the market. Its shares closed at INR 41.60 apiece on Tuesday (July 26). Zomato’s shares have fallen by over 18% over the past five days.
The company’s shares plunged to an all-time low of INR 40.55 on Wednesday (July 27) according to BSE data, before recovering to 43.09 apiece by 11 AM.
The foodtech startup had come under a massive sell-off pressure at the end of last week as the one-year lock-in period for internal investors ended on July 23, 2022, a year after the company’s shares were listed on the bourses at a massive premium.
Moore became the first internal investor to make an exit from Zomato, however, since Monday, the company’s shares have been on a freefall.
However, brokerage firm Jefferies has kept the confidence in Zomato, retaining its ‘buy’ rating and a price target (PT) of INR 100 on the company’s stock. Jefferies stated that the foodtech startup is a great case for long-term investors to buy right now.
Zomato’s investor sentiment has been negative since the $570 Mn acquisition of quick commerce startup Blinkit in June. The alleged late disclosure of the deal further aggravated investors, some of which wrote to SEBI regarding the same.
Since the announcement of the Blinkit deal on June 25, Zomato’s share price has gone down by almost 37%.
The foodtech startup clocked a loss of INR 359.7 Cr in the March 2022 quarter, up 168% from the INR 134.2 Cr in the previous quarter. With the addition of Blinkit, another loss-making startup, concerns regarding the feasibility of the acquisition have created a huge sell-off pressure. Blinkit itself has reported losing INR 84 for every order.
Interestingly, many analysts have called this sell-off a near-term effect of the Blinkit deal, with Zomato likely increasing its revenue with a new Zomato Pro subscription. However, it still is a wait-and-watch game as to whether Zomato can wade through the mess it has in front of it.
