Zomato shares jump 6% after multiple block deals; HSBC raises target price to Rs 120

Zomato share price: Shares of Zomato rallied as much as 6.2 per cent to hit a high of Rs 100.55 apiece on the BSE on Wednesday (August 30) after multiple block deals consisting of 10 crore shares, or 1.16 per cent took place during the pre-open session. As per a Zee Business report, SVF Growth Fund (Softbank) was slated to sell 10 crore shares in the company today.

The deal was expected to take place at Rs 94 per share, the report said further. SVF Growth Fund had a 3.42 per cent stake in Zomato, and after today's stake sale, its holdings in the company will come down to 2.25 per cent. The stock eventually ended at Rs 99.88, up 5.53 per cent.

Meanwhile, HSBC has raised the target price on Zomato to Rs 120 from Rs 102 earlier. It maintains a 'buy' call on it. 

On Monday, Tiger Global and billionaire Yuri Milner's DST Global sold a 1.8 per cent stake in the online food ordering platform for Rs 1,412 crore through open market transactions. Axis Mutual Fund, SBI Life Insurance Company, ICICI Prudential Life Insurance Company, Founders Collective Fund, Morgan Stanley Asia Singapore, and Societe Generale, among others, were the buyers of the shares of Zomato.

Earlier this month, JM Financial said in its report that Zomato's stock would remain volatile in the near term on account of market speculation around possible exits by some pre-IPO shareholders (VC/PE/Chinese investors) of the company as well as erstwhile shareholders of Blinkit who had received it under a share swap deal.

"While we cannot accurately predict when (if at all) these shareholders would want to exit, we note that several of them are already sitting on sizeable gains, albeit a large chunk of it is unrealised. A few cues from past actions of these investors suggest that at least some of them would be eager to book profits post the recent run-up in the stock", IANS reported, citing JM Financial's report.

An analysis of the cost of acquisition of shares owned by pre-IPO and ex-Blinkit shareholders of Zomato suggests they are currently sitting on substantial gains on their investments, a large chunk of which is, however, unrealised, the report added. CLICK HERE TO READ MORE 

Zomato Q1 Results

Online food delivery firm Zomato reported its first-ever consolidated profit after tax of Rs 2 crore in the April-June quarter of 2023-24, driven by strong revenue growth. The company had posted a net loss of Rs 186 crore in the same quarter last fiscal, Zomato said in a regulatory filing. Consolidated revenue from operations in the first quarter of the current fiscal was at Rs 2,416 crore as against Rs 1,414 crore in the year-ago period, it added. Total expenses were higher at Rs 2,612 crore as compared to Rs 1,768 crore in the same quarter a year ago.

Zomato said its food delivery business posted adjusted revenue of Rs 1,742 crore in the first quarter as compared to Rs 1,470 crore in the year-ago period. Revenue from Hyperpure, the B2B business, was at Rs 617 crore as compared to Rs 273 crore in the first quarter of the last fiscal. READ MORE