As part of the large sell-off in Zomato Ltd, its pre-IPO investor Moore Strategic Ventures has sold its entire holding in recently listed food delivery platform marking a loss on its over one year-old bet.
Moore Strategic Ventures sold 4.25 crore shares at Rs 44 per share in the online food delivery aggregator firm, according to block sale data.
The aggregate sale of shares by Moore was around Rs 187 crore as against its purchase price of Rs 191 crore for 6,347 compulsorily convertible Series G shares in Zomato, which was sold by Nexus Ventures in January 2021, just months ahead of its initial public offering (IPO).
The resultant sale translates into a loss of Rs 4 crore.
Ant Group-backed Zomato made a stellar debut in July last year listing over 50% on both the Indian stock exchanges last year.
It had hit its 52-week high in mid-November at Rs 169.10 per share on the BSE. However, concerns around its valuation have brought down its market value by about 68% after the listing.
Since last week, the foodtech startup has come under a massive sell-off pressure as the one-year lock-in period for internal investors holding around 613 crore shares or 78% of Zomato’s stock ended last week on Saturday (July 23).
The stock has plunged over 18% for the last five days.
On Wednesday, Zomato’s shares touched a 52-week low at Rs 40.55 only to recover at Rs 43.95 per share at the end of the day’s trade.
Moore Strategic Ventures became the first internal investor to make an exit from Zomato, whose market capitalization (Rs 34,605 crore or $4.3 billion) has fallen below its last private market valuation of $5.5 billion.
Investor sentiments have turned negative for Zomato and other tech startups since the past few months amid concerns of their sky-high valuations. Further, Zomato's acquisition announcement of quick commerce firm Blinkit aggravated the worries about its path to profitability.
With a contrarian view, global brokerage firm Jefferies on Tuesday said that Zomato makes for a great case for long-term investors and set a 12-month target price of its shares at Rs 100 apiece. Jefferies also said that Zomato management has accelerated its journey towards better unit economics and is now eyeing a break-even in the food delivery business in the foreseeable future.