Zomato’s QIP at Rs 265.91 per share; shares in focus on fundraising plans

Zomato shares are likely to draw attention as the company kicks off its first qualified institutional placement (QIP) since its IPO in July 2021. The floor price is set at Rs 265.91 per share. Proceeds will primarily support the expansion of its quick commerce arm Blinkit, alongside advertising and marketing efforts.

Key plans for funds:

• Blinkit Expansion: Rs 2,137 crore to establish and operate dark stores, with plans to reach 1,000 stores by FY24-end and 2,000 by 2026.
• Branding & Marketing: Rs 2,492 crore for promotional initiatives across its offerings.

The move comes amid intensified competition, with Swiggy recently raising Rs 4,499 crore through its IPO and Zepto securing over $1.3 billion in fresh funding.

Strong financial performance:
Zomato achieved profitability in Q1 FY24, reporting a five-fold increase in net profit at Rs 176 crore for Q2 FY24 and a 68 per cent rise in revenue to Rs 4,799 crore. CEO Deepinder Goyal, who has waived his salary till March 2026, emphasized the need to enhance cash reserves given the evolving competitive landscape.

This development is expected to escalate cash burn in the quick commerce segment, impacting unit economics across players.