Zomato stock rises over 4% after firm buys stake in Mukunda Foods

Shares of food delivery firm Zomato rose over 4% in early trade today after the company said that it would acquire a 16.66 per cent stake in Mukunda Foods Private Ltd, a food robotics company, for a cash consideration of $5 million. Zomato stock gained 4.37% to Rs 79.95 against the previous close of Rs 76.60 on BSE. The stock has gained after three days of consecutive fall. Later, it fell to its 52-week low of Rs 75.55 on BSE.

The stock has lost 44.34% since the beginning of this year and fallen 10% in a month. Zomato shares are trading lower than 5-day, 20-day, 50-day, 100-day and 200-day moving averages.

A total of 11.97 lakh shares of the firm changed hands, amounting to a turnover of Rs 9.24 crore. The market cap of Zomato rose to Rs 60,220 crore on the BSE.

The stock hit a 52-week high of Rs 169.10 on November 16, 2021.

"The board of directors of Zomato has approved (a) acquisition by way of subscription of 13,289 (thirteen thousand two hundred eighty nine) Series Bl compulsorily conve1tible preference shares and 10 (Ten) equity shares collectively aggregating to 16.66% of the share capital of Mukunda Foods Private Limited (Mukunda) on a fully diluted basis, for an aggregate cash consideration of INR equivalent of US$5 million (Proposed Investment)," Zomato said.

"Our investment will help Mukunda Foods scale faster, help reduce restaurant food prices, expand margins, and enhance customer delight," it added.

Also read: Zomato to grant up to $150 million of loan to Grofers India

Mukunda is a food robotics company that designs and manufactures small robotic equipment to automate food preparation for restaurants.

Their products enable restaurants to scale rapidly while maintaining consistency in food quality and customer experience across multiple outlets. Mukunda also helps restaurants to become more efficient by reducing manpower cost, wastage and increase kitchen throughput.

"The board of directors of Zomato has approved (a) acquisition by way of subscription of 13,289 (thirteen thousand two hundred eighty nine) Series Bl compulsorily conve1tible preference shares and 10 (Ten) equity shares collectively aggregating to 16.66% of the share capital of Mukunda Foods Private Limited (Mukunda) on a fully diluted basis, for an aggregate cash consideration of INR equivalent of US$5 million (Proposed Investment)," Zomato said.

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In another development, the firm has granted a loan of the (nearly Rs 1,146 crore ) equivalent of $150 million to Grofers India Private Limited ("GIPL ") in one or more tranches. The interest rate for the loan will be 12% per annum or higher with a tenor of not more than a year.

This loan will support the capital requirements of GIPL in the near term and is in line with our stated intent of investing up to $400 million cash in quick commerce in India over the next 2 years, Zomato stated in a communication to bourses.