Shares of online food delivery company Zomato may appear under heavy pressure tomorrow, Wednesday 30 November. According to a report by our affiliate news channel CNBC-Awaaz, Alibaba is going to sell Zomato shares worth about Rs 163 crore ($ 20 million) through a block deal on Wednesday. Alibaba has about 13% stake in Zomato through its 2 subsidiaries. According to the report, Alibaba may sell around 3% of its stake in Zomato on Wednesday, after which its stake in the company will come down to 10%.
The two subsidiaries through which Alibaba has invested in Zomato include Ant Financial and Alipay.
According to the report, this block deal can be done at a price of about 5-6% less than the current market price of Zomato. Investment banker Morgan Stanley is the broker for the deal.
Alibaba is selling its partial stake at a time when Zomato has seen several senior-level resignations recently. Along with this, the company has also started layoffs and has decided to reduce the number of employees by about 4 percent.
Shares fell 55% in a year
Zomato's revenue has registered a sharp growth in the last few months, even though its shares have fallen by about 55 per cent in the last one year. Zomato shares today closed at Rs 63.35 on BSE, down 1.63 per cent on November 29.
Many pre-investors reduced their stake
The lock-in period for Zomato's pre-IPO investors ended on July 23 this year. At that time 78% or about 613 crore shares of Zomato were held by pre-IPO investors. After the end of the lock-in period, many pre-IPO investors have reduced their stake in Zomato in the last few months and now the name of Alibaba is also going to be added to it.
During the month of August, some of Zomato's big investors like Sequoia Capital India, Tiger Global Management, Uber, Delhivery Hero reduced their stake in the company through block deals.
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