Zomato Shareholders Approve Rs 8,500 Crore Fundraise Through QIP
"Our cash balance has reduced from Rs 14,400 crore to about Rs 10,800 crore (mainly on account of funding past quick commerce losses and some equity investments and acquisitions)," it said
Food delivery aggregator Zomato announced on Saturday that its shareholders approved a proposal to raise capital through a Qualified Institutions Placement (QIP). The approval was granted through a special resolution passed via a postal ballot conducted through remote e-voting.
Last month, the Zomato board approved a proposal to raise up to Rs 8,500 crore through a Qualified Institutions Placement (QIP). The company stated that the funds are intended to strengthen its balance sheet at this juncture, according to a filing.
Zomato also reported a decline in its cash balance by Rs 1,726 crore compared to the previous quarter, primarily due to the Rs 2,014 crore deal consideration for acquiring Paytm’s entertainment ticketing business.
"Our cash balance has reduced from Rs 14,400 crore to about Rs 10,800 crore (mainly on account of funding past quick commerce losses and some equity investments and acquisitions)," it said.
While the business is now generating cash, compared to being loss-making at the time of its IPO, the company believes it is crucial to bolster its cash balance in light of the increasingly competitive landscape and the significantly larger scale of operations today.
"We believe that capital by itself does not give anyone the right to win (and that service quality is the key determinant of success), but we want to ensure that we are on a level playing field with our competitors, who continue to raise additional capital," it said.
The food delivery aggregator reaffirmed that its quick commerce business is operating near adjusted EBITDA break-even while its food delivery business margins remain stable. The company also clarified that it has no plans for minority investments or acquisitions at this time.
According to its current shareholding structure, Zomato's foreign ownership stands at 50.48 per cent, with 5.25 per cent categorised as foreign direct investment (FDI) and the remainder classified under foreign institutional investors (FII).
On Friday, Zomato Ltd’s shares closed at Rs 264.15, a decline of Rs 2.60, or 0.97 per cent, on the BSE.
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