Chinese e-commerce giant Alibaba Group Holding Ltd is planning to sell a stake of around 3% in food delivery platform Zomato Ltd worth $200 million through a block deal, Reuters quoted a report as saying on Tuesday. Wall Street brokerage Morgan Stanley would be the broker to the deal, according to reports.
The block deal is expected to take place tomorrow, and the Alibaba Group may offer the shares at a 5-6% discount to today’s close price. On Tuesday, shares of Zomato closed 1.63% lower at ₹63.35 apiece from the previous day’s close on the NSE.
The Chinese conglomerate held a 12.98% stake in Zomato as of 30 September.
Post the deal, Alibaba will continue to hold about 10% stake in the food delivery giant.
Similar block deals have been carried out in various tech firms such as Nykaa, Paytm, and Policy bazaar.
Earlier in August, Uber Technologies sold its 7.8% stake in Zomato for $392 million via a block deal on local exchanges.
The block deal comes months after the one-year lock-in-period for pre-IPO shareholders of Zomato ended on 23 June , 2022. The end of the lock-in period increases the supply of tradeable Zomato shares in the market.
Zomato raised ₹9,375 crore through an IPO at an issue price of ₹76 per share and listed on the stock exchanges on 23 July last year.
The stock hit a record ₹159.75 in November 2021 and has been falling since then, amid a global carnage in technology stocks, led by rising interest rates and foreign investors dumping emerging market equities, leading to a sharp slowdown in the availability of easy money that had helped tech companies grow at a tremendous pace.
Earlier this month, Zomato reported a narrow second-quarter loss, as volumes and value of its online orders rose.
Share price of Zomato has fallen more than 55% in 2022, even as the food giant witnessed sharp revenue growth in recent quarters.
Revenue from operations increased to ₹1,661.3 crore during the July-September quarter against ₹1,024.2 crore in the corresponding period of the previous financial year.
The company had also said that this is the first quarter where it has crossed the billion-dollar annualised revenue mark. However, its total expenses rose to ₹2,091.3 crore during the quarter under review.
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