Zomato Stock Price Plunges to a Record Low as Share Lock-In Period Ends

Zomato made a stellar debut in July 2021 in the Mumbai market, but its shares have lost more than 60 percent of their value since.

By Reuters | Updated: 25 July 2022 13:17 IST

Zomato Stock Price Plunges to a Record Low as Share Lock-In Period Ends

Photo Credit: Reuters

Including Monday's losses, Zomato shares have lost nearly 30 percent

Highlights

Zomato fell more than 14 percent to a record low on Monday
Zomato made a stellar debut on July 23, 2021 in the Mumbai market
Investors are concerned about sell-off through employees and promoters

Shares of Indian food delivery company Zomato fell more than 14 percent to a record low on Monday, as a one-year share lock-in period for promoters, employees and other investors expired following the 2021 listing.

Zomato made a stellar debut on July 23, 2021 in the Mumbai market, but its shares have lost more than 60 percent of their value since then on concerns about valuations and as global growth stocks cratered.

"Investors are concerned about the sell-off through employees and promoters," said Prashanth Tapse, vice president of research at Mehta Equities.

[Sponsored] Samsung Galaxy S24: The Ultimate Camera Phone With Smarter On-Device AI

Investors are also not comfortable with the acquisition of Blinkit, he said, adding that the fundamentals of the company were still good.

Including Monday's losses, Zomato shares have lost nearly 30 percent since the company announced its deal to buy local grocery delivery startup Blinkit in June.

On Monday, the stock posted its biggest intraday percentage drop since January 24 in heavy-volume trade of 2.7 times the 30-day average.

Facing Unfair Competition From Big Tech, Domestic Tech Players Say

The company now has a market value of Rs. 366 billion, compared with Rs. 1.29 trillion at its all-time high in November.

Analysts say Zomato needs to pump more money into Blinkit as the quick-commerce sector grows at a rapid clip, with rivals Swiggy, Reliance Industries-backed Dunzo, Tata-backed BigBasket and Zepto making big investments.

Zomato is scheduled to report its first-quarter results on August. 1. The company had reported a 75 percent jump in fourth-quarter revenue in May, while gross order value - or the total value of all food delivery orders on its online platform - surged 77 percent year-on-year to a record high.

On Friday, Reuters reported that Domino's Pizza's India franchise will consider taking some of its business away from Zomato and Swiggy if their commissions rise further.

Why is Oppo making strange choices with its flagship Reno series? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

Affiliate links may be automatically generated - see our ethics statement for details.

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.