Shares of Indian food delivery company Zomato fell more than 14 percent to a record low on Monday, as a one-year share lock-in period for promoters, employees and other investors expired following the 2021 listing.
Zomato made a stellar debut on July 23, 2021 in the Mumbai
market, but its shares have lost more than 60 percent of their value since then
on concerns about valuations and as global growth stocks cratered.
Investors are also not comfortable with the acquisition of
Blinkit, he said, adding that the fundamentals of the company were still good.
Including Monday's losses, Zomato shares have lost nearly 30
percent since the company announced its deal to buy local grocery delivery
startup Blinkit in June.
On Monday, the stock posted its biggest intraday percentage
drop since January 24 in heavy-volume trade of 2.7 times the 30-day average.
Analysts say Zomato needs to pump more money into Blinkit as
the quick-commerce sector grows at a rapid clip, with rivals Swiggy, Reliance
Industries-backed Dunzo, Tata-backed BigBasket and Zepto making big
investments.
Zomato is scheduled to report its first-quarter results on
August. 1. The company had reported a 75 percent jump in fourth-quarter revenue
in May, while gross order value - or the total value of all food delivery
orders on its online platform - surged 77 percent year-on-year to a record high.
On Friday, Reuters reported that Domino's Pizza's India
franchise will consider taking some of its business away from Zomato and Swiggy
if their commissions rise further.