US-based investment major Tiger Global, via its VC fund Internet Fund III Pte Ltd, has exited online food delivery platform Zomato by selling its entire shareholding for Rs 1,123.85 crore.
Tigal Global sold its remaining stake in Zomato via open market transactions on August 28, according to a filing with the Bombay Stock Exchange (BSE).
The VC firm sold around 12.34 crore shares or 1.44 per cent stake in Zomato at an average price of Rs 91.01 per share.
Zomato stock went up 1.5 per cent to close at Rs 92.35 on Monday.
Zomato’s stock is likely to be volatile in the near term on account of market speculation around possible exits by some pre-IPO shareholders (VC/PE/Chinese investors) of the company as well as erstwhile shareholders of Blinkit who had received it under a share swap deal, JM Financial Institutional Securities had said in its recent report.
“While we cannot accurately predict when (if at all) these shareholders would want to exit, we note that several of them are already sitting on sizeable gains, albeit a large chunk of it is unrealised. A few cues from past actions of these investors suggest that at least some of them would be eager to book profits post the recent run-up in the stock,” the report said.
A sizeable proportion of Zomato’s shares could be available for trade in the near term.
“We strongly suggest that long-term investors use these liquidity events to build a sizable position in Zomato as it not only offers a strong play on India’s online food services market but is also, post the Blinkit acquisition, shaping up into a formidable diversified play on online retail,” the report mentioned.
Several pre-IPO and ex-Blinkit investors are sitting on substantial unrealised gains. An analysis of the cost of acquisition of shares owned by pre-IPO and ex-Blinkit shareholders of Zomato suggests they are currently sitting on substantial gains on their investments, a large chunk of which is, however, unrealised.