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Zomato: Zomato to raise Rs 8,500 crore via QIP

 October 22, 2024  Leave a Comment on Zomato: Zomato to raise Rs 8,500 crore via QIP
Growfast


Zomato‘s board on Tuesday approved the food and grocery delivery firm’s plans to raise Rs 8,500 crore via the qualified institutional placement route, it said in a stock exchange filing.

Detailing the rationale behind raising additional capital, Zomato’s founder and CEO Deepinder Goyal said that the company is looking to enhance its cash position in the context of the current competitive climate.

“While the business is now generating cash (vis-a-vis a loss making business at the time of IPO), we believe that we need to enhance our cash balance given the competitive landscape and the much larger scale of our business today,” Goyal said in the company’s shareholders letter.

“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,” he added.

Zomato‘s key rival in the food delivery and quick commerce space Swiggy will soon launch a $1.25 billion initial public offering. Mumbai-based Zepto, which competes with Zomato-owned Blinkit in quick commerce, has also raised upwards of $1 billion in the last four months on account of strong investor interest in the rapid delivery space.

Growfast


ET had reported on October 19 that Zomato’s fresh capital raise could accelerate the quick commerce industry’s cash burn as the competitive scenario heats up.

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