Zomato Gains Momentum with Sensex Inclusion and Fundraising Approval

Shares of Zomato rose by up to 6 percent in early trade on November 25, driven by its inclusion in the 30-stock BSE Sensex and shareholder approval for a Rs 8,500 crore Qualified Institutional Placement (QIP). By 9:20 AM, Zomato's shares were trading at Rs 279.16 on the NSE.  

With this inclusion, Zomato becomes the first new-age technology company to join the Sensex, replacing JSW Steel in the index from December 23. This development aligns with Zomato's strong performance this year, with its shares rallying over 113 percent. Asia Index Private, a wholly-owned subsidiary of BSE, announced the reconstitution of key indices, including the BSE 100 and BSE Sensex 50.  

In addition to the Sensex inclusion, Zomato's shareholders approved the company's QIP to raise Rs 8,500 crore. This comes after the company's board cleared the fundraise last month to strengthen its balance sheet. The need for additional funds is evident as Zomato reported a reduction in its cash reserves by Rs 1,726 crore during the September quarter, attributed primarily to the Rs 2,014 crore acquisition of Paytm’s entertainment ticketing business. The company’s cash balance now stands at approximately Rs 10,800 crore, down from Rs 14,400 crore, reflecting its investments in quick commerce and other acquisitions.  

Zomato emphasized its commitment to maintaining service quality while addressing the challenges of a competitive market. The company aims to sustain margins in its core business and achieve adjusted EBITDA break-even for its quick commerce segment. It also stated there are no plans for further minority investments or acquisitions at this time.  

Analysts have expressed optimism regarding Zomato's growth trajectory. Akriti Mehrotra, Research Analyst at StoxBox, highlighted the company's cost management and efficiency, noting that the Blinkit acquisition has significantly strengthened its quick commerce business. "Blinkit has reached its breakeven point, contributing to the overall profitability and stability of Zomato's operations," she said.  

Viral Bhatt, Founder of Money Mantra, also acknowledged Zomato's strong brand position and diversified business model as key factors offering growth potential in the evolving food delivery and quick commerce sectors.  

These developments mark a significant step forward for Zomato in India's competitive retail and technology sectors.