The board of Zomato, an online food delivery firm, has approved the raising of Rs 8,500 crore through qualified institutional placement (QIP) of equity shares, Zomato Ltd said in a regulatory filing. Zomato CEO Deepinder Goyal said that the fundraising is meant to strengthen the company's balance sheet at this point.
The proposed fund-raise comes at a time when rival Swiggy is gearing up to go public with its IPO as the quick commerce battle intensifies in India. Goyal further clarified that the food delivery business margins continue to remain steady and there is also no plan for any minority investments or acquisitions.
The company's founder Goyal emphasised the need to enhance its cash balance given the competitive landscape and the much larger scale of the business. "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," he said.
In the letter to shareholders, the company's CFO Akshant Goyal shared that its cash balance "reduced by Rs 1,726 crore as compared to the previous quarter on account of the deal consideration (of Rs 2,014 crore) for the acquisition of Paytm's entertainment ticketing business".
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Meanwhile, Zomato reported a consolidated net profit of Rs 176 crore in the second quarter ended on September 30, 2024. It was Rs 36 crore in the same quarter last fiscal. Zomato's consolidated revenue from operations stood at Rs 4,799 crore. It was at Rs 2,848 crore in the year-ago period, it added. Total expenses were at Rs 4,783 crore in the quarter under review against Rs 3,039 crore in the corresponding period a year ago, it said.
(With inputs from PTI)
