'From takeout to top index': Zomato to become 1st new-age tech firm in Sensex. What it means for investors

Zomato is making waves in Indian markets, stepping into the elite BSE Sensex club on Monday, December 23. The food delivery giant will become the first tech-driven company to join the prestigious 30-share index, replacing long-time member JSW Steel in a move signaling the growing influence of new-age businesses on India’s economy.

The shake-up comes as part of the Sensex’s semi-annual rebalancing, with the changes finalized at the close of trading on Friday, December 20. According to Nuvama Alternative & Quantitative Research, Zomato’s inclusion is expected to draw $513 million in passive inflows, while JSW Steel’s removal could trigger $252 million in outflows.

Zomato’s rapid rise to the top reflects its dominance in the market. The company’s stock has delivered 126% returns year-to-date, outpacing the Sensex’s modest 10% gain in 2024. Over the past two years, Zomato’s shares have surged an eye-popping 350%, closing Friday at ₹281.85, with a market cap of ₹2.71 lakh crore. It now ranks higher than established stalwarts like Tata Motors, Adani Enterprises, and Asian Paints.

This ascent has been fueled by Zomato’s financial turnaround. In Q2 FY25, the company posted a 389% jump in net profit, reaching ₹176 crore, while revenue soared 68% YoY to ₹4,799 crore. Gross order value from its B2C businesses climbed 55% YoY to ₹17,670 crore, powered by stronger margins and near-break-even operations in its quick commerce business.

For JSW Steel, the story has been far less exciting. The steelmaker has managed just a 5% gain year-to-date, underscoring a slower growth trajectory compared to tech disruptors like Zomato.

Zomato’s entry into the Sensex isn’t just about numbers—it’s a symbol of India’s shifting economic priorities. The Sensex, which once mirrored the dominance of traditional sectors like steel and energy, is now embracing innovation-led businesses. The 30 companies in the index contribute 13% of India’s GDP, up from 10% in 2005, reflecting their growing role in driving economic growth.

With Zomato’s inclusion, the Sensex is betting big on India’s tech-fueled future.