As a result of the one-year share lock-in term for promoters, workers, and other investors expiring upon the 2021 IPO, shares of Indian meal delivery startup Zomato dropped more than 14% on Monday to a record low.
Zomato made a spectacular launch on July 23, 2021, in the Mumbai market, but since then, due to valuation worries and the collapse of global growth companies, its shares have lost more than 60% of their value.
Records Low in Shares
According to Prashanth Tapse, vice president of research at Mehta Equities, investors are concerned about the sell-off through staff and promoters. He said that the company’s fundamentals were still strong while noting that investors were uneasy about the acquisition of Blinkit.
Zomato shares have dropped over 30% since the business announced its agreement to acquire local grocery delivery startup Blinkit in June, not excluding Monday’s losses. In Monday’s strong volume activity, which was 2.7 times the 30-day average, the stock had its largest intraday percentage decline since January 24.
The company’s market worth is currently 366 billion rupees ($4.58 billion), down from its peak of 1.29 trillion rupees in November.
Zomato and Others
As per analysts, Zomato must spend more resources on Blinkit as the quick-commerce industry is expanding quickly and competitors Swiggy, Reliance Industries-backed Dunzo, Tata-backed BigBasket, and Zepto are all making significant investments.
On August 1, Zomato is expected to release its first-quarter financial results. The company reported a 77 percent year-over-year increase in gross order value, or the total value of all food delivery orders placed through its online platform, in May, following a 75 percent increase in fourth-quarter revenue.
As per the sources, we also came to know that Domino’s Pizza’s India franchise may decide to compete with Zomato and Swiggy if their commissions continue to climb.
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