Zomato has embarked on its first significant fundraising initiative since its IPO in July 2021, aiming to secure up to Rs 8,500 crore through a qualified institutional placement (QIP). The company has set a floor price of Rs 265.91 per share for the offering, a nearly 3 per cent discount to its recent closing price of Rs 273.60 on the BSE. The fundraising effort comes at intense competition in the quick commerce sector, with rivals such as Swiggy and Zepto also aggressively scaling operations.
The proceeds from the QIP are slated for multiple uses, with a substantial focus on expanding Zomato’s quick commerce arm, Blinkit. The company plans to invest Rs 2,137 crore in establishing and operating a network of dark stores and warehouses to support its 10-minute delivery model.
Blinkit targets 1,000 dark stores by the end of the current fiscal year and aims to double that number by 2026. Alongside infrastructure investments, Zomato intends to allocate Rs 2,492 crore to boost advertising, marketing, and branding across its business suite, including food delivery, live events through its District app, and its B2B grocery supply platform, Hyperpure.
Zomato’s push for capital comes as its competitors ramp up efforts in the same space. Bengaluru-based Swiggy recently raised Rs 4,499 crore through its IPO, while Zepto has secured over USD 1.3 billion in funding recently. Both companies are scaling their dark store networks, with Zepto aiming for over 700 stores by FY25 and Swiggy Instamart increasing its count to 741 from 557 earlier this year. This competitive environment has intensified the cash burn in the sector, raising concerns over long-term profitability for players.
Despite these challenges, Zomato has demonstrated significant financial improvement. The company reported a 68 per cent year-on-year increase in operating revenue for the second quarter of FY24, reaching Rs 4,799 crore. Net profit for the quarter jumped fivefold to Rs 176 crore, marking a profitable trajectory since the first quarter of the fiscal year. Zomato’s CEO, Deepinder Goyal, has also extended his salary waiver until March 2026.
