After shares of Zomato tumbled over 14 per cent and hit its all-time low in intra-day trade on Monday, many people offered their analysis about what went wrong with the online food delivery platform. The outspoken Ashneer Grover, too, decided to add his two bits to this.
What came as a surprise, though, was his acerbic take on BlinkIt (formerly called Grofers), which he had founded. According to the former BharatPe founder and Shark Tank India judge, if Zomato had merged with Swiggy instead of BlinkIt, things would have been hunky-dory for the company. "On the stock market - @letsblinkit served piping hot misery to @zomato in 10 minutes! Yeh hi agar @Swiggy ko merge kar liya hota to ₹450 ka stock hota !!"Grover tweeted.
Blinkit reportedly spent Rs 600 crore between November and February to expand its business and acquire customers in the deep-discounted grocery delivery space. It has been increasingly looking at ways to cut costs and reduce its cash burn.
In May 2022, there were reports that the company laid off people, shut some of its dark stores and delayed vendor payments to controlling cash burn amidst intense competition in the quick commerce space. Three months later, Zomato bought the company in an all-stock deal valued at around $570 million. This came after Zomato invested $100 million in Blinkit for a 10 per cent stake at a valuation of $1 billion before its IPO in July 2021.
Going, Going, Gone
The Zomato stock fell 14.26 per cent to Rs 46 a piece on both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), its record low yesterday morning, as the one-year lock-in period for its pre-IPO investors ended. The scrip eventually settled at Rs 47.55 per share, down Rs 6.10 (11.37 per cent) on the BSE, while on the NSE, it ended at Rs 47.70 apiece, down Rs 5.95 (11.09 per cent).
Over 3.80 crore shares of Zomato were traded on the BSE, and over 23.28 crore shares exchanged hands on the NSE during the day, data from the respective bourses showed. The company's market capitalisation at the end of the trading session stood at Rs 37,439.23 crore, BSE data showed.
Interestingly, while Zomato's shares have been taking a beating for the past few months, Grover had recommended buying its stocks. Last year, he had made a Rs 150 crore personal application in the Zomato IPO.
On 9 May 2022, he tweeted, "It's all about perspective. If you were a Zomato employee and exercised your ESOP (employee stock ownership) at ₹140 or higher price post IPO, you probably paid more cost per share as Income Tax than what you can buy it today from the market freely. At ₹56 per share price, markets are giving everyone ESOPs."
Some Twitterati reminded him about this advice amidst his latest U-turn. Some even recalled how he had offered similar buying advice for Paytm, which saw its share prices tumble.
Recently, Grover and his wife, Madhuri Jain Grover, formed a new company called Third Unicorn Private Limited. This will be his third start-up after building unicorns like BharatPe and BlinkIt.
