Zomato, the food aggregator giant, witnessed a 6% surge in its stock price during opening trade on 25th November, driven by two significant milestones: its upcoming inclusion in the 30-stock BSE Sensex and shareholder approval for a ₹8,500 crore Qualified Institutional Placement (QIP).
At 9:20 AM, Zomato shares were trading at ₹279.16 on the NSE, showcasing investor optimism.
Sensex inclusion marks a milestone for Zomato
In a significant reshuffle of the BSE Sensex, Zomato has emerged as the first new-age tech stock to enter the prestigious 30-stock index, replacing JSW Steel. This inclusion, effective from 23rd December, highlights Zomato's growing prominence in the Indian equity market.
Zomato's stock has delivered an impressive rally, gaining over 113% year-to-date. The reconstitution of the index, announced by Asia Index Private (a wholly-owned BSE subsidiary), also extends to other indices like BSE 100, BSE Sensex 50, and BSE Sensex Next 50.
₹8,500 crore QIP to strengthen Zomato's balance sheet
The approval of a ₹8,500 crore QIP by Zomato's shareholders is another significant development. This fundraising aims to bolster Zomato's cash reserves, which declined by ₹1,726 crore during the September quarter, largely due to its ₹2,014 crore acquisition of Paytm's entertainment ticketing business.
Currently, Zomato's cash balance stands at ₹10,800 crore, down from ₹14,400 crore. The infusion from the QIP is expected to enhance the company's liquidity and support its competitive strategy in the evolving food delivery and quick commerce landscape.
Strong financial strategy fuels optimism
Since its IPO, Zomato has successfully transitioned to a cash-generating model. With steady margins in its core business and an adjusted EBITDA break-even in its quick commerce segment, the company reassured investors of its robust financial management.
Unlike its competitors, Zomato has no immediate plans for further acquisitions or minority investments. Instead, the company remains focused on enhancing service quality and maintaining a level playing field.
Buy shares online to capitalise on growth opportunities
With Zomato's inclusion in the Sensex and its strategic QIP fundraising, now may be an opportune time for investors to consider this stock. Platforms that allow you to buy shares online make it easy to participate in such promising growth stories.
By adding Zomato to their portfolio, investors can benefit from the company's strengthened financial position and market leadership in the competitive food delivery sector.
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