The Gurgaon-based company is hoping to enter the instant grocery delivery market with the purchase of Blinkit
After the lock-in period for investors who purchased shares of Zomato before its initial public offering ended, the company’s shares fell as much as 14.3% on Monday, setting a new low.
The company’s market cap sank to $4.5 billion from $13.2 billion on its launch day one year prior as the stock fell as low as 46.15 rupees per share.
Prior to its IPO, Zomato had collected $1.3 billion from a variety of investors, including Tiger Global, Fidelity, the Singaporean government, the Canada Pension Plan, T. Rowe Price, Morgan Stanley, and Steadview. The investors had paid 76 rupees to subscribe for the shares.
Following Zomato’s proposed acquisition of instant delivery company Blinkit in a deal that many analysts say is overpriced and rife with conflict of interest, the company’s shares, which have lost more than 60% of their value since the listing day last year, have come under additional pressure recently.
Zomato is in competition with Swiggy, a much younger company that earlier this year raised money in a round from investors including Invesco at a valuation of $10.7 billion. The Gurgaon-based company is hoping to enter the instant grocery delivery market with the purchase of Blinkit, where it will compete with even more firms, including Zepto, which is financed by Y Combinator.