Food and grocery delivery major Zomato has raised INR 8,500 crore through a qualified institutional placement (QIP) largely led by domestic investors, the company said on Friday.
The issue which opened on November 25 saw participation from a clutch of domestic investors with Motilal Oswal Mutual Fund emerging as the biggest participant picking up a significant 21% share of the QIP allocation as it pumped in around INR 1,751 crore.
ICICI Prudential Mutual Fund, HDFC Mutual Fund, and Kotak Mutual Fund were the other significant domestic buyers in the QIP.
The shares in the QIP were priced at INR 252.62, nearly a 10 percent discount to Zomato’s Friday closing price of INR 279.4 on the BSE.
Quick commerce companies have come under the radar of the government for operating dark stores (which are mini warehouses) while selling to consumers directly. Under local regulations, foreign-owned companies can operate online marketplaces like Amazon and Flipkart in India but cannot sell on them.
Zepto CEO Aadit Palicha told ET in an interview on November 22 that they aim to become a company with a majority Indian ownership.
Palicha said after its latest funding, more than 30% of the company’s ownership is with Indian shareholders, who include Manipal group’s Ranjan Pai, Ramesh and Rajeev Juneja of Mankind Pharma and the Motilal Oswal group.
Foreign shareholding at Zomato currently stands at 52 percent which is likely to be trimmed by around 2% post the funding.
Zomato’s fundraise comes amid an intense battle raging in the fast-growing quick commerce sector with players like Zepto raising billions of dollars to corner market share. On November 22, ET reported that quick commerce firm Zepto raised an additional USD 350 million in funding led by Motilal Oswal’s private wealth division, which has also backed the newly listed Swiggy.
The fundraise, which is Zomato’s first such exercise since its initial public offering (IPO) in July 2021, comes at a time when its rivals have mopped up significant amounts of capital. Swiggy raised INR 4,499 crore in primary capital through its IPO earlier this month, while Zepto has scooped up over USD 1.3 billion over the last four months.
The quick growth for quick commerce has come at the cost of skyrocketing cash burn for companies like Zepto as they open more dark stores and fund incentives and discounts to acquire customers. ET reported that Zepto’s monthly cash burn has risen to more than uSD 35 million, signalling the constant need for capital infusion.
According to the QIP’s preliminary placement document, Zomato plans to use the funds primarily to expand the footprint of its quick commerce business, Blinkit, and to invest in advertising and marketing efforts. Blinkit, which runs 791 dark stores as of September 30, is looking to take its total dark store count to 2,000 by the end of 2026. It plans to allocate INR 2,137 crore for “expenditure towards setting up and running operations of dark stores and warehouses” and INR 2,492 crore for “advertising, marketing, and branding initiatives” across its business offerings.
Zomato reported a 68 percent year-on-year (YoY) jump in its operating revenue at INR 4,799 crore for the September quarter. It saw a five-fold jump in net profit for the quarter at INR 176 crore. On November 25, ET reported that Zomato chief executive Deepinder Goyal extended his salary waiver till March 31, 2026. Initially, Goyal had waived off his salary for a period of three years starting April 1, 2021. He continues to hold a 4.2 percent stake in Zomato.
