Zomato’s board is set to meet on October 22, 2024, to consider raising funds through a Qualified Institutional Placement (QIP), with the potential to raise approximately ₹8,500 crore, according to sources. The food delivery giant is reportedly planning to cap foreign institutional investor (FII) holding at 49% as part of the fundraising effort.
The fundraise is aimed at increasing domestic ownership of the company above 50%, helping Zomato maintain a healthy balance between foreign and domestic investors. Sources suggest that the company is looking to expand its equity base through this QIP to support its long-term growth strategy.
Potential Uses for Funds
According to a report by CNBC, the raised funds could be allocated to a variety of strategic initiatives. These may include investments in quick commerce, marketing activities, or even potential acquisitions to fuel inorganic growth. Karan Taurani, highlighted that investor interest remains strong in high-growth companies like Zomato, which could benefit from these additional funds.
Taurani also mentioned that the planned fundraise is likely to draw significant investor attention, given the company’s growth potential in the Indian market. Zomato has been actively exploring new avenues for growth, and this fundraise could help bolster its position in a highly competitive sector.
As the company prepares for its board meeting, market participants will be closely watching the developments, particularly the impact of a capped FII holding and how the company plans to utilize the newly raised capital.
