Zomato shines with Sensex entry; QIP set at Rs 8500

Shares of Zomato are set to garner attention as the company secures two major milestones: its inclusion in the benchmark Sensex and approval for a Rs 8,500 crore Qualified Institutional Placement (QIP).

Zomato is set to replace JSW Steel in the 30-stock Sensex, effective December 23, marking its debut as the first new-age tech stock in the index. This move reflects Zomato’s rising market prominence, underpinned by a stellar rally of over 113 per cent this year. The reconstitution of key indices, including BSE 100 and Sensex 50, was announced by Asia Index Private, a BSE subsidiary.

The Rs 8,500 crore QIP approval comes as Zomato seeks to reinforce its balance sheet. Despite reporting a cash outflow of Rs 1,726 crore in the September quarter, largely due to acquisitions, the company’s financial health remains robust. Zomato’s cash reserves currently stand at Rs 10,800 crore, positioning it well for strategic growth initiatives in the competitive food delivery market.

Operationally, Zomato is making strides toward sustainable growth. Its core food delivery business is delivering steady margins, and its quick commerce segment is on track for near-break-even adjusted EBITDA. The acquisition of Blinkit has been a significant contributor, helping Zomato establish a strong foothold in the high-growth quick commerce space.

The company has emphasized maintaining service quality and competitiveness, particularly as industry peers raise additional capital. With no immediate plans for further acquisitions or minority investments, Zomato is focused on optimizing its existing businesses.

For investors, Zomato presents a compelling case. Its diversified revenue streams, efficient cost management, and ability to leverage acquisitions like Blinkit have strengthened its market position. These factors, coupled with its inclusion in the Sensex, indicate growing investor confidence.

On Friday, Zomato shares ended at Rs 264.20 on the NSE, reflecting a slight dip but maintaining robust year-to-date gains. With strong fundamentals and strategic focus, Zomato remains a noteworthy pick for investors eyeing long-term growth in the tech-driven consumer space.