Zomato Stock Price In the recent past, there has been a steady decline in Zomato stock. Investor confidence was shaken after the Blinkit deal. But after the results for the April-June quarter, there is a correction in equities.
Zomato shares fell nearly 10% on Wednesday amid reports that ride-hailing app Uber sold its entire stake in the food delivery company. The stock fell 9.62% to Rs 50.25 on BSE. Later, it regained investor confidence and was trading at Rs 54.40, down 2.16%.
Shares of food aggregator and delivery company Zomato rose about 18-20% on Tuesday. After the company announced a reduction in net loss in the first quarter (April-June) of 2022-23, investor confidence returned and Zomato shares rallied. The company’s net loss in the quarter amounted to Rs 185.7 crore, compared to Rs 343.1 crore in the corresponding period of the previous financial year. The company’s revenue in the quarter increased by 67% to Rs 1,413.9 crore from Rs 844.4 crore in the same quarter last year. The increase in turnover is also explained by an increase in the value of orders.
Note that in July, Zomato completed its first year as a listed company on Indian stock exchanges. The initial public offering of the publicly traded food aggregator received an exceptional reception on July 23, 2021. It was taken out at a price 38.25 times higher. It all started well with a 53% bonus. Although currently, Zomato’s share price is down about 65-70% from the high of Rs 169. Even though the company made decent profits after its IPO in July last year, it was unable to take it further. Shares of Zomato recently fell after the end of the mandatory one-year lock-up period to raise paid-in capital.
Things got worse after the Blinkit deal
Zomato’s margins were negatively affected due to rising fuel costs and inflation. The company is currently planning to reduce its losses and increase its profits. After the acquisition of Blinkit, Zomato’s stock kept falling. Let us inform that Zomato board had recently approved the proposal to acquire fast trading company Blinkit for Rs 4,447 crore. Blinkit was formerly known as Grofers. The acquisition is believed to make better use of Zomato’s hyperlocal delivery fleet. This will also help reduce delivery costs.