Zomato shares rise 6% amid heavy trading volumes and platform fees news

Shares of Zomato surged as much as 6 per cent during the early trading session on Monday amid the heavy trading volumes and platform fees levied by the food delivery aggregator. The stock has delivered multibagger returns to investors in the last few months.

According to the data from the exchange, multiple block deals of Zomato shares were undertaken during the initial part of the session. The heavy trading volumes confirm the same. However, Business Today could not ascertain the buyers and sellers as of writing this report on Monday.

According to the date from BSE, over 15.24 crore shares of Zomato worth Rs 1,388.81 crore exchanged hands as of 10 am on Monday. Similarly, more than 4.62 crore shares amounting to Rs 431.30 crore were traded on the National Stock Exchange (NSE) as of the same time.

In other news, the foodtech giant, Zomato has started levying a platform fee of Rs 2 per order for select users, has extended the fee to more users and also hiked it. The fees goes to Rs 3 per order in some tier-II cities. The exemption of Zomato Gold subscribers from this fees has also been called-off.

Shares of Zomato surged as much as 6 per cent to Rs 96 at the opening tick on Monday, following the news and volumes, before giving up its gains partially to Rs 93, with a total market capitalization of more than Rs 80,000 crore. The stock had settled at Rs 90.94 on Friday. Shares of Zomato have surged more than 116 per cent from its 52-week low at Rs 44.35 hit in January this year.

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The lock-in period for investors post the Blinkit deal ended on Friday, August 25. As a result, the shares received during the Blinkit deal will unlock for trading on Monday. SoftBank owned 3.35 per cent stake in the food delivery aggregator Zomato, while other investors including Sequoia Capital and TigerGlobal also held significant stakes.

Earlier in August 2022, Zomato completed the acquisition of quick commerce company Blinkit (formerly known as Grofers) and its warehousing and ancillary services business. Zomato had announced the deal in June 2022 after its board approved the Rs 4,447 crore transaction to acquire Blinkit. The implied value for Zomato shares which Softbank received stood at Rs 70.76 per share.

Zomato had turned profitable for the first-time ever in the June 2023 quarter. The food aggregator platform company had reported a consolidated profit after tax of Rs 2 crore compared to a loss of Rs 186 crore in the year-ago period. Revenue from operations grew 71 per cent year-on-year to Rs 2,416 crore in Q1FY24, up from Rs 1,414 crore in the corresponding period a year ago.

Global brokerage firm Morgan Stanley has maintained an 'overweight' rating on Zomato with  a target of Rs 115 per share. The overseas investment banker said that if the company sticks through its platform fee it could drive improvement in profitability.

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