Zomato, India's leading food delivery platform, recently witnessed a significant block deal valued at ₹5,438.50 crore on August 20. The transaction, which was later upsized, is believed to have involved Antfin Singapore Holding, a subsidiary of the Alibaba Group, as the likely seller.

Transaction Overview:

In this major block deal, 21 crore shares of Zomato, representing a 2.4% stake, were exchanged at a floor price of ₹258 per share. This price reflects a discount of nearly 2% compared to the stock's previous closing price. As a result of the deal, Zomato's shares experienced a slight decline, dropping over 1% in early trading. By 09:21 am, the shares were trading at ₹259.20 on the NSE.

Likely Seller and Implications:

While the parties involved in the transaction haven't been officially confirmed, reports from CNBC-TV18 on August 19 suggested that Antfin Singapore Holding was aiming to offload a 2% stake in Zomato, valuing the transaction at approximately $556 million (₹4,650 crore). Earlier reports had indicated that Antfin was planning to sell 1.54% of its shares, estimated to be worth $408 million.

As of Zomato's latest shareholding data, Antfin Singapore Holding owned a 4.3% stake in the company. The sale of this stake triggers a 90-day lock-in period, preventing Antfin from executing another round of equity dilution during this time.

Zomato's Performance and Market Response:

The stake sale follows a robust quarterly earnings report from Zomato, where the company's net profit surged 126.5 times to ₹253 crore for the April-June quarter, compared to the same period last year. This impressive profit boost was driven by increased platform fees and improved operational efficiency in its quick commerce arm, Blinkit.

Zomato's strong performance and growth potential have caught the attention of investors, leading to a 20% rise in the stock price over the past month. The stock has been a multi-bagger, delivering an impressive 112% return year-to-date and nearly 200% over the past year. Notably, brokerages such as CLSA and UBS Securities are bullish on Zomato's future, with price targets predicting the stock could surpass the ₹300-mark within the next 12 months.

Key Takeaways:

• Block Deal: ₹5,438.50 crore worth of Zomato shares changed hands, likely involving Antfin Singapore Holding.
• Stake Sold: 21 crore shares, or a 2.4% stake, were sold at ₹258 per share.
• Market Reaction: Zomato's stock dipped over 1% following the transaction but remains strong overall.
• Lock-In Period: A 90-day lock-in period is now in effect for Antfin before any further stake sales.
• Performance: Zomato's impressive Q1 results and strong growth in quick commerce continue to drive investor confidence and bullish price targets.

This transaction underscores the dynamic shifts in Zomato's ownership structure as well as the company's continued ascent in the Indian tech landscape. Investors will be keenly watching Zomato's next moves as it solidifies its position in the market.