Zomato Stock Price: zomato share The fall continued on Thursday, marking its fourth consecutive session of decline. The food delivery giant’s stock has fallen nearly 25 per cent since Monday after the company acquired Quick Commerce delivery firm blinkit 4,447.5 crore in an all-stock deal.
From a startup that sought to solve the problem of ‘hunger’, to becoming the first Indian unicorn to enter the public markets, Zomato’s journey so far has been a top-notch turvy ride.
The listing of a food-delivery company on the Indian stock exchanges opened up opportunities for a group of young startups. Back in 2021, when Zomato was listed as a public company, everyone welcomed it with great enthusiasm. It did not take long for the company to weather the adverse conditions and market volatility.
The latest round of corrections has wiped out Rs 11,680 crore from investors’ kitty as its market capitalization slid from Rs 47,366 crore to Rs 35,686 crore in four days.
stock price history
Currently, Zomato shares are down 28 per cent from the issue price of Rs 76, while the counter has taken a huge hit of 67 per cent from its 52-week high of Rs 169.10 in November 2021.
What do analysts say?
Elaborating on the relevance of Blinkit to Zomato’s business, Founder and CEO Deepinder Goyal said that Blinkit, like food delivery, is also a hyperlocal business and caters to the need of quick delivery of products to the customers.
While several equity research firms and their analysts said that the deal will add to Zomato’s business in the long run, the fall in share prices indicates that investors are not so confident about the acquisition adding value to the business.
According to analysts, Zomato’s addition of another loss-making company to its portfolio has hurt investor sentiment. The prospect of burning more cash has also made investors cautious.
Meanwhile, Kotak Institutional Equities Research has already downgraded the stock from ‘buy’ to ‘add’ and reduced the fair value estimate to Rs 77 from Rs 83. “We believe that Blinkit will require an investment of over $400 million as envisaged by Zomato, given the increasing competitive intensity,” the research firm said.
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