In a significant market move, Motilal Oswal Mutual Fund executed a block deal, offloading 4.5 crore shares of leading foodtech company Zomato for a total transaction value of INR 621.6 crore. The shares were sold at a unit price of INR 138.15 in an open market transaction, marking a strategic shift in the mutual fund’s investment portfolio.
Mutual Fund’s Position and Buyers’ Interest: Motilal Oswal Flexi Cap Fund, as of the end of December 2023, held a significant stake in Zomato, amounting to 15.94 crore shares, representing a 1.86% ownership in the foodtech giant. The shares divested by Motilal Oswal Mutual Fund were swiftly acquired by prominent institutional buyers, including BNP Paribas, Citigroup, Goldman Sachs, Morgan Stanley, and Societe Generale.
- Societe Generale secured 3.3 crore shares at the transaction price of INR 138.15 apiece.
- Goldman Sachs Investments (Mauritius) acquired 45 lakh shares at the same unit price.
- Morgan Stanley Asia (Singapore) purchased 39 lakh shares in the block deal.
- Citigroup Global Markets (Mauritius) increased its position with the acquisition of 24 lakh shares.
- BNP Paribas Arbitrage participated in the transaction by lapping up 12 lakh shares at the specified price.
Market Response and Share Performance: Following the block deal, Zomato’s shares experienced a nearly 3% decline during early trading on the same day. Ultimately, the stock closed the session 4.44% lower at INR 133.40 on the BSE. This market development coincides with recent updates from major brokerages such as HSBC, Goldman Sachs, and Jefferies, all of which raised their price targets for Zomato. The bullish outlook from these brokerages was based on anticipated robust growth in Zomato’s food delivery and quick commerce verticals.
Financial Performance and Investor Sentiment: Zomato reported noteworthy financial achievements, with its Q1 FY24 marking the company’s maiden profitable quarter, followed by a profitable Q2. The profit after tax (PAT) surged impressively by 18 times, reaching INR 36 crore in the September quarter, compared to INR 2 crore in the preceding quarter. The positive financial results have contributed to a significant rally in Zomato’s share price over the past year, with a remarkable 150.52% surge in the last 12 months.
