Shares of Zomato Ltd fell by over 6 per cent on Monday after announcement that the online food delivery platform will acquire Blink Commerce Pvt Ltd (formerly known as Grofers) for Rs 4,447.48 crore.
The stock declined 6.40 per cent to settle at Rs 65.85 on the BSE. During the day, it fell 7.53 per cent to Rs 65.05.
At the NSE, it went lower by 6.59 per cent to settle at Rs 65.85 apiece.
Zomato Ltd on Friday said it will acquire Blink Commerce Pvt Ltd for Rs 4,447.48 crore in a share swap deal as part of its strategy of investing in quick commerce business.
The company's board at a meeting held on Friday approved the acquisition of up to 33,018 equity shares of Blink Commerce Pvt Ltd from its shareholders for a total purchase consideration of Rs 4,447.48 crore at a price of Rs 13.45 lakh per equity share, Zomato said in a regulatory filing.
Blink Commerce Pvt Ltd runs the online quick commerce service under the Blinkit brand. It was formerly known as Grofers.
The transaction will be carried out through issuance and allotment of up to 62.85 crore fully paid-up equity shares of Zomato having face value of Re 1 each at a price of Rs 70.76 per equity share on a preferential basis, it added.
The company already holds 1 equity share and 3,248 preference shares presently in BCPL, the filing said.
"This high cash burning sector houses fierce competition from the likes of Zepto, Dunzo, Swiggy Instamart, BigBasket, etc and it will be interesting to see how this expensive investment by Zomato pans out in the future," said Shivam Bajaj, Founder and CEO at Avener Capital, on Zomato - Blinkit deal.
