In August, New York-based Tiger Global sold its remaining 1.44% stake in Zomato, making a full exit from the company. Masayoshi Son-led SoftBank followed in December, selling off its remaining stake in the Gurugram-based firm.
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The Japanese investor sold its entire holding in Zomato for around $340 million, compared to the $300 million investment it had made in Blinkit, which was acquired by Zomato.
In August 2022, Zomato had issued fresh equity shares to all the selling shareholders of quick-commerce platform Blinkit as consideration for its acquisition. Following the transaction, Zomato had negotiated a 12-month lock-in for these shares, as against the statutory requirement of six months. Tiger Global and SoftBank were among the investors who received stakes in Zomato through Blinkit.
Meanwhile, Kuwait Investment Authority bought 88 million shares in Zomato in the September quarter, and subsequently increased its stake by purchasing another 6.7 million shares in the October-December quarter, according to information sourced from the company’s shareholding pattern on the BSE.
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Similarly, the . The city-state’s sovereign wealth fund Temasek already owned 169 million shares, representing around 1.9% stake, in Zomato.
However, the Canada Pension Plan Investment Board (CPPIB) marginally reduced its stake in Zomato over the last few quarters.
Global brokerages have revised their investment thesis on Zomato, expecting the company’s next phase of growth to come from Blinkit. “We believe food value is well captured in the current stock price, and further upside will largely be driven by the quick-commerce business. We now also expect profitability improvement to be gradual in the near-term and hence market focus will be on quick-commerce growth,” HSBC Global Research said in a note.
ET reported on January 5 that Zomato has decided to keep Blinkit at arm’s length from its food-delivery business, pausing its integration with the main platform, and focusing on building the two verticals as separate brands instead.
Mutual funds take a shine too
In addition to sovereign funds, domestic mutual funds have also increased stake in Zomato – in line with the trend of this investor class increasing its bets on stocks of new-age firms. As of December 31, mutual funds had hiked their stakes in the company to 12.34% from 10.56% three months prior, and 5.72% as of December 31, 2022.
Mutual funds have been investing in other new-age firms such as PB Fintech, the parent of Policybazaar, Delhivery, Paytm and Nykaa as well. Market watchers attribute this to the 2022 correction in the stocks of these companies, in addition to offloading by foreign investors.
ETtechET reported on January 13 that domestic investors have upped their holdings in One 97 Communications Ltd, the parent of financial services player Paytm, as SoftBank, one of its biggest investors, pared its stake. Mutual funds held 4.99% in Paytm as of December 31, up from 2.79% a quarter ago. Domestic retail investors in the payments company also increased their stake to 12.85%, from 8.73%.
Policybazaar-parent PB Fintech, which also saw a complete exit by SoftBank, witnessed increased interest from mutual funds. Domestic mutual funds took their holding in PB Fintech up to 10.28% as of December 31, against 7.83% at end-September.
Having sold off its entire investment in PB Fintech for around $650 million, over an investment of around $200 million, SoftBank clocked a 3.25-times return.
Similarly, mutual funds have also accumulated shares in new-age logistics firm Delhivery and omnichannel beauty and personal care retailer Nykaa, increasing their stakes in the December quarter.