Shares of Zomato, the online food aggregator, reached an all-time high of ₹304.65 apiece on Thursday, December 5, 2024. The stock rallied by as much as 4.5% on the BSE, marking a significant milestone in the company’s remarkable growth trajectory. Zomato’s stock has delivered stellar returns of 150% over the past year, driven by strong financial performance, strategic initiatives, and upcoming inclusion in the Sensex index.
Fundraising and Strategic Plans
Last week, Zomato announced it had successfully raised ₹8,500 crore by selling equity shares to qualified institutional investors (QIPs) to fund its growth objectives. CEO Deepinder Goyal emphasized that the fundraising effort was aimed at strengthening the company’s balance sheet and positioning it for long-term growth.
The QIP issue opened on November 25, and the company’s Fund Raising Committee approved the allotment of 33.65 crore shares to eligible qualified institutional buyers at an issue price of ₹252.62 per share, aggregating to ₹8,500 crore. The shares were allotted at a 5% discount to the floor price, which was set at ₹265.91 per share.
Strong Financial Performance
In the second quarter of FY25, Zomato reported a consolidated net profit of ₹176 crore, compared to ₹36 crore in the same period last fiscal. Consolidated revenue from operations surged to ₹4,799 crore, up from ₹2,848 crore a year ago. However, total expenses also increased to ₹4,783 crore in Q2 FY25 from ₹3,039 crore in the corresponding period last year.
The company attributed its robust revenue growth to its strategic acquisitions, including Orbgen Technologies Private Ltd (OTPL) and Wasteland Entertainment (WEPL), which handle its movie ticketing and events businesses, respectively. These acquisitions, finalized in August 2024, have made Zomato’s financials incomparable with previous quarters.
Inclusion in Sensex
Asia Index Private Ltd, a subsidiary of BSE, recently announced that Zomato will be included in the prestigious 30-stock Sensex index on December 23, 2024. This inclusion marks a significant achievement for the company and underscores its growing influence in the Indian stock market.
Market Trends
Zomato’s exceptional one-year returns of 150% reflect investor confidence in its business model, operational expansion, and ability to maintain profitability. The company’s strong Q2 performance, fundraising efforts, and entry into the Sensex are seen as major catalysts for the stock’s rally.
With its focus on diversifying services and scaling its operations, Zomato continues to position itself as a leader in India’s burgeoning digital economy. Its inclusion in the Sensex is expected to attract further investor interest, cementing its place among India’s top-performing companies.
Stock Performance
As of December 5 2:30 PM, Zomato shares were trading at ₹299.60 on the NSE, up 4.66% for the day. The stock has gained 22.68% over the past month and a remarkable 64.03% over the last six months, showcasing sustained momentum in its performance.
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