Zomato posted another robust quarter with Q2 revenue of Rs 4799 crore led by growth in Blinkit, Hyperpure and Going Out segments, even as the Food Delivery segment continued on its steady path. Zomato’s food delivery GOV grew at a steady pace of 21 per cent, Blinkit grew at a healthy pace of 122 per cent YoY on the back of accelerated store expansion done over the last three quarters. Going Out and Hyperpure segments too saw very strong sequential expansion during the quarter. “Reported EBITDA beat was driven by Going-out and lower than expected ESOP costs, which helped off-set a miss in food delivery profits,” stated an analysis report by JM Financial while adding that Zomato remains one of the fastest growing consumption names with significant room for margin expansion across all its business segments.
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Fundraise announcement: Zomato building war-chest for expansion
Zomato board also approved Rs 8,500-crore fundraising via the issue of a qualified institutional placement (QIP), amidst its rival Swiggy’s upcoming $1.2 billion IPO, which could potentially go up to about $1.4 billion. The fundraise despite having a strong balance sheet, per Deepinder Goyal, CEO of Zomato, is needed to enhance cash balance “given the competitive landscape and the much larger scale of our business today”.
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“With rising competition in the quick-commerce space, Zomato aims to shore up its defenses through a strategic capital raise, with an upper cap of $1 billion. This capital raise will ensure Zomato maintains financial flexibility, allowing it to continue scaling Blinkit while countering competitive pressures effectively. It also allows Zomato to change its ownership structure in favor of Indian investors – this should allow the company to hold inventory in its quick commerce business,” stated a report by Motilal Oswal Financial Services (MOFSL)
“Zomato’s board approved Rs 85 billion worth of fundraise through the QIP route,
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