Zomato stocks in focus on report SoftBank may sell shares via block deal

Shares of Zomato will be in focus on Friday morning amid a media report that suggested the Japanese multinational investment holding company SoftBank, through its affiliate SVF Growth Singapore Pte, was looking to offload 1.1 per cent stake in the online food delivery platform via block deals on Friday.

As per the report by CNBC-TV 18, the offer price could be in the range of Rs 109.40 to Rs 111.65 per share, suggesting a discount of up to 2 per cent to Thursday's closing price. The offer size could be about Rs 1,020 crore, as per the report.

Shareholding data showed SVF Growth (Singapore) Pte Ltd held 18,71,38,736 shares or 2.17 per cent take in Zomato as on September 30.  Other prominent investors in the company included Antfin Singapore Holding Pte (55,02,50,900 shares or 6.51 per cent), Alipay Singapore Holding (29,60,73,993 shares or 3.44 per cent) and Kuwait Investment Authority Fund 601          (8,79,38,059 shares or 1.02 per cent stake.

Earlier this month, ICICI Securities in a note on Zomato said: "We believe the quick commerce business could turn contribution positive (full quarter basis) by Q2FY24E and profitable at the adjusted Ebitda level by Q1FY25. In our view, the quick commerce business could improve adjusted Ebitda (as percentage of GOV) by 620 bps over the next four quarters led primarily by: scale benefits on corporate overheads (210 bps), decrease in other fulfilment cost (180 bps), mix improvement (110 bps) and increase in ad revenues."

This brokerage suggested a target of Rs 200 per share for the stock in its bull case scenario and Rs 70 in its bear case scenario, implying a risk reward skew of 2.6:1 towards the upside.

"This re-inforces our view that Zomato remains a buy despite the 120 per cent re-rating from all-time lows," it said.

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