Antfin Singapore Holdings is looking to sell a 1.54% stake in Zomato in a block deal valued at $408 million, deal terms reviewed by Mint show. The shares will be sold at a floor price of ₹251.68 per share, the terms showed.
Antfin has been paring its stake in the food-delivery platform and currently holds a 4.3% stake, as per shareholding data available on stock exchanges. The share sale will be done at a discount of 4% over Monday’s closing price of ₹262.17 on the NSE, it showed.
“Antfin will sell 136 million shares (1.54% of the total outstanding shares) of the company at 4% discount to the last close price on NSE,” the term sheet said.
Global investment banks Morgan Stanley and Goldman Sachs are managing the share sale.
With the food-delivery company reporting a remarkable net profit of ₹253 crore in the June quarter, up from ₹2 crore a year ago, the stock has grown manifold. As per Mint analysis, while the Nifty 50 has seen a 13% gain so far this year, Zomato’s stock has surged 110.6% year-to-date, outperforming the benchmark index by a significant margin.
The company’s growth was driven by increased gross order value across its food delivery, quick commerce, and going-out verticals, making the three months through June its fifth consecutive quarter of positive earnings. Higher other income, which rose to ₹236 crore from ₹181 crore a year earlier, also contributed to this profitability, supported by Zomato’s substantial cash reserves of over ₹12,000 crore, Mint reported last week.
The company’s revenue surged 74% year-on-year in the June quarter, reaching ₹4,206 crore compared to ₹2,416 crore last year. Zomato’s earnings before interest, tax, depreciation, and amortisation (Ebitda) also turned positive, standing at ₹177 crore, up from an Ebitda loss of ₹48 crore in the same period last year. Ebitda margin was at 4.2%.
With the surge in share price, some of the company’s investors such as Alipay, and SoftBank have been cashing out with manifold gains.
In March this year, Antfin sold a 2% stake in open market for ₹2,828 crore or $341.5 million.
Ant Group invested in Zomato via two entities. One entity held a 16.5% stake and was the second largest shareholded of Zomato ahead of its IPO two years ago. This entity fully exited last year. It had invested ₹1,354 crore in 2018 ($200 million then), VCCircle reported earlier this year.
Ant’s other entity had bought shares worth ₹1,892 crore across two tranches in 2018 and 2020.
Zomato’s shares closed 0.83% lower at ₹262.30 apiece on Monday. A CNBC-TV18 report said that Antfin’s stake in Zomato is valued at close to ₹10,000 crore at Monday’s closing price.
Block deal information:
According to the TV channel’s report, UBS has maintained its buy rating on Zomato’s stock and increased its target price to ₹320 from ₹260 earlier. The new target price is the second highest after CLSA’s target price of ₹350 for Zomato.
