China’s Alipay is set to sell its complete 3.44% stake in the Indian food delivery firm Zomato for $400 million, Reuters reported on Wednesday. The Chinese company will do so through block deals, the report added citing sources.
The report added that the Chinese company wanted to offload its stake when the “market timing” was conducive. It’s worth noting that Zomato’s shares had hit their 52-week high earlier this month after it reported profits in the September quarters. According to the report, the block deals are expected to happen at Rs 111.28 per share, which is roughly a 2.2% discount on Zomato’s closing price on Tuesday.
It’s worth noting that Alipay’s sister company Antfin Singapore Holding owned another 6.39% stake in the food delivery firm as of September 2023.
Zomato has made a surprising comeback in recent months despite the startup ecosystem in India has generally struggled in terms of fundraise or performance at the stock exchanges.
After turning profitable for the first time on a quarterly basis, foodtech major Zomato has escalated its profit after tax by 18-fold to Rs 36 crore in the second quarter of the current fiscal year or Q2 FY24. If we compare year-on-year, the firm reported Rs 251 crore loss in Q2 FY23.
The Gurugram-based company has registered a nearly 18% jump in its revenue to Rs 2,848 crore in the September quarter against Rs 2,416 crore during June Quarter, according to a stock exchange filing. During the last quarter, the firm’s total revenue stood at Rs 3,060 crore including other income of Rs 212 crore.
Its other key verticals B2B supplies Hyperpure and Blinkit contributed Rs 745 crore and Rs 505 crore, respectively to the collections during Q1 FY24. In the previous quarter, their revenue contribution stood at Rs 617 crore in Rs 385 crore respectively.
At the time of filing this story, Zomato is trading at Rs 118.20.
Alipay is following a tested playbook by exiting the Indian startups when the markets begin giving dividends. Moreover, there’s a general frown upon startups having Chinese investors especially post India-China border clash in 2020. In August, Antfin had sold more than 10% stake in Paytm. In February, Alibaba sold its remaining stake in the fintech firm for roughly $167 billion.