Zomato stock to remain under pressure as Uber may exit food delivery company through block deal

Ride-hailing app Uber is selling off its entire holding in Indian food delivery company Zomato for at least USD 373 million (Rs 2,939 crore) through a block deal of shares, merchant banking sources said on Tuesday.

The development comes on a day when the Zomato scrip witnessed a nearly 20 per cent surge to close at Rs 55.60 apiece on the BSE.

The sources said the offer price range for the deal to be carried out on Wednesday will be between Rs 48-54 per share.

At the lower end of the band, which is a 13.6 per cent discount to Tuesday's close, the total money to be raised through the sale comes at Rs 2,939 crore (USD 373 million), the sources said.

Bofa Securities is the sole book runner for the block deal.

The offer size represents 7.8 per cent of the overall outstanding shares for the company, which has had a volatile movement on the bourses since debuting last year.

When contacted, an Uber India spokesperson declined to share any details.

It can be noted that Uber picked up the stake in Zomato after the latter acquired its local food business Uber Eats in an all stock deal in 2020.

Later, Zomato listed on the bourses and the stock had been under selling pressure for the past few weeks till the news of halving of losses and business reorganisation heightened buyers' interest in Tuesday's trade.