According to sources familiar with the matter, the deal was transacted at a price of INR50.44 per share.
Zomato shares fell by almost 9.6 percent on India’s Bombay Stock Exchange. The stock later pared losses and was trading down 5.7 percent, closing at INR55.6 on the Bombay Stock Exchange.
The offer size of the block deal is reported to be set at 612 million shares according to the company’s term sheet. The sale of Uber’s stake is reported to be worth USD392 million, or INR30.97 billion.
Uber had earlier reported a net loss of USD2.6 billion for Q2 2022, out of which a loss of USD1.7 billion was related to equity investments that included the company’s stake in Zomato.
Uber stake sale occurs at crucial time for Indian startups
The stake sale by Uber has taken place at a time when startups in India have been struggling to raise fresh capital, hindered by a global market slump. The Indian startup community raised over USD35 billion in total fundraising for 2021.
The sole bookrunner for the transaction was BofA Securities, and the stake was purchased by almost 20 global and Indian funds, which included Franklin Templeton, Fidelity and ICICI Prudential from India. These companies declined to comment on the transaction.
Earlier in the week, Zomato had said in a statement that it had narrowed its loss for the June quarter to INR1.86 billion from INR3.56 billion for the corresponding period last year. The company also stated that it had recorded more orders for the quarter.
Zomato is also reportedly considering reorganising its management structure, with each individual business unit having a CEO, even as the parent company is being renamed as ‘Eternal’.
Zomato is backed by Ant Group from China, and had a spectacular debut on the Bombay Stock Exchange in 2021. Since then, however, the company’s shares have lost almost 50 percent of their value amid growing concerns on valuations and growth prospects, in addition to turmoil amongst global stocks.