Food delivery platform Zomato approved and authorized the opening of the issue day for its qualified institutional placement (QIP) on November 25. The company informed the exchanges that the floor price for the issue is Rs 265.91 per equity share.
Zomato has further highlighted that Rs 2,137 crore of QIP’s proceeds will be used by it to expand its quick commerce segment
Food delivery platform Zomato approved and authorized the opening of the issue day for its qualified institutional placement (QIP) on November 25. The company informed the exchanges that the floor price for the issue is Rs 265.91 per equity share.
Further, the new shares will have a nominal value of Rs 1. This comes after the board of directors of the food delivery platform approved the QIP in their meeting that was held on October 22, 2024. Following this, the share holders of the company approved the same via a special vote (postal ballot) on November 22. In simple words, a QIP is a fund-raising tool for big companies. As per Investopedia, “A qualified institutional placement (QIP) is, at its core, a way for listed companies to raise capital without having to submit legal paperwork to market regulators.”
Now, the trading window that deals in securities of the company has been closed. The company informed the exchanges, “Further, in accordance with the company's Code for Prevention of Insider Trading and the SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended, the trading window for dealing in the securities of the company has been closed for all designated persons and their immediate relatives(s) from November 26, 2024, and the same shall remain closed till 48 hours after determination of issue price.”
The total amount that will be raised by the company is Rs 8,500 crore. Zomato has further highlighted that Rs 2,137 crore of QIP’s proceeds will be used by it to expand its quick commerce segment. The company said that the fund will be utilized “towards setting up and running operations of dark stores and warehouses."
The rest of the Rs 2,492 crore of the company will be used for advertising, marketing, and branding initiatives. Further, Zomato will also use some of the proceeds in technology infrastructure and cloud infrastructure.
Meanwhile, speaking about the QIP in an investor call, the Chief Financial Officer of Zomato, Akshant Goyal, said that the fundraise would not dictate or influence how the company runs the business at this point. Zomato’s QIP comes at a time when competition in the quick commerce segment is increasing. Some of the prominent players in the industry include Zepto, Instamart, Big Basket, and others. As of 11:58 am, Zomato’s shares were trading at Rs 277.31 in NSE, a 1.46 per cent increase from the previous closing price.