InvestorQ : Can you tell me about the bulk sale of Zomato shares by Uber Technologies on 03rd August?
swati Bakhda made post

Can you tell me about the bulk sale of Zomato shares by Uber Technologies on 03rd August?

Sam Eswaran answered.
1 year ago

On Wednesday, Uber Technologies, the holding company of Uber, sold its entire 7.8% stake in Zomato in a series of block deals. Thus Uber has fully exited its holding in Zomato. The total value of the stake sale was worth $392 million and BOFA Securities was the sold arranger for the sale deal in Zomato. The deal was done at a price of Rs50.44 per share and the entire 7.8% stake held by Uber Technologies was liquidated at that price on an average. Uber Technologies overall sold 61.2 crore shares worth Rs3,087, or nearly $392 million.

The Zomato stock was the most liquid stock by number of shares and value of trading on the NSE and the BSE on Wednesday, 03rd August. On the NSE, a total of 59.90 crore shares were traded worth a total value of Rs3,265 crore. On the BSE, Zomato saw total of 71.78 crore shares changing hands at a value of Rs3,660 crore. Obviously, bulk of the block trade in Zomato was executed on the BSE, as is evident from the record volumes on the Zomato counter on both the stock exchanges.

Let us now look at the buy side. Obviously, with so much of shares being sold and simultaneously absorbed, there must be substantial buyers too. According to reports, the stake in Uber Technologies in Zomato was purchased by 20 global and Indian funds, including some popular names like Fidelity, Franklin Templeton and ICICI Prudential Mutual Fund. This is apparent from th fact that the closing price of the Zomato stock on Wednesday was nearly 10% above the price at which the block deal was executed on the exchange.

The buoyancy in the stock of Zomato can be attributed to the robust quarterly numbers for the June 2022 quarter. In fact, Zomato reported flattering numbers for the quarter wherein the net loss nearly halved on a yoy basis to Rs186 crore compred to Rs356 crore in the year ago period. This was on the back of lower cash burn and higher top line growth. Zomato managed to show good traction in terms of Gross Order Value (GOV), despite stiff competition from Swiggy and other emerging players in the food delivery space.