A day after American ride-hailing giant Uber exited Zomato, U.S.-based hedge fund Tiger Global also reportedly sold half of its stake in the online food delivery company as the one-year lock-in period for pre-IPO investors ended last month. The lock-in period, which ended on July 23, allows anchor investors to sell their shares in the open market.
Tiger Global, through its investment vehicle Internet Fund IV, owned a 5.11% stake in Zomato before the lock-in ended. Following the end of the lock-in period, Tiger Global pared around 18 crore shares of the restaurant aggregator, reducing its shareholding in the company to 2.77%.
The hedge fund disclosed this information a day after Uber Technologies, one of its key stakeholders, offloaded its entire 7.78% stake in homegrown food delivery company Zomato for ₹3,088 crore ($390 million). As per the exchange data, a total of 612 million shares were sold at ₹50.44 apiece, a discount of 9.3% to Tuesday’s closing price of ₹55.60 on the BSE, to over a dozen institutional investors. The shares were sold to over a dozen institutional investors, including Fidelity Investments, ICICI Prudential Life Insurance, and others. Fidelity Investments purchased shares worth ₹274 crore, while ICICI Prudential Life Insurance acquired shares amounting to ₹226 crore, the data showed.
Uber is the first major shareholder that exited Zomato after the one-year lock-up on its pre-IPO shares ended last month. In January 2020, the American ride-hailing app had acquired a stake in the food technology firm after it sold the Indian operations of Uber Eats, the food delivery business run by Uber, for around $350 million.
Ahead of the initial public offering (IPO), Zomato had raised ₹4,196 crore from several anchor investors such as the Government of Singapore, Tiger Global Investment Fund, New World Fund, Fidelity Fund, Morgan Stanley Investment Fund, Canada Pension Plan Investment Fund, BlackRock Global Funds, Goldman Sachs, Neuberger Berman, Abu Dhabi Investment Authority, and Pinebridge Global Funds.
Zomato had allotted 55.22 crore equity shares to anchor investors at a price of ₹76 apiece, which was almost 45% of the total issue size. The company had raised ₹9,375-crore from the IPO, which opened for subscription on July 14 and closed on July 16, 2021. The stock made its debut on the domestic bourses on July 23, 2021, by listing at a 51% premium over the issue price of ₹76 per share in the BSE.
The stock has been consistently under stress since listing amid concerns about valuations and future growth prospects. The homegrown food delivery platform currently trades 66% lower than its life-time high of ₹169.10 touched on November 16, 2021. It recently hit an all-time low of ₹40.55 on July 27, 2022.
On Thursday, Zomato shares opened higher at ₹55.90, against the previous closing price of ₹55.40 on the BSE. The stock swung between gains and losses, hitting an intraday high and low of ₹57.45 and ₹54.50, respectively, during the session so far. By 1:00 PM, as many as 6,960 lakh shares changed hands over the counter on the BSE as compared to two-week average volume of 227.67 lakh stocks, while market capitalisation dropped to ₹41,921.6 crore. By 1:00 PM, as many as 103.72 lakh shares changed hands over the counter on the BSE as compared to two-week average volume of 943.43 lakh stocks, while market capitalisation stood at ₹44,522 crore.