Swiggy rival Zomato shareholders approve Rs 8,500 crore fundraise via QIP

Deepinder Goyal-led Zomato, which competes with the newly listed Swiggy Ltd., announced that its shareholders have approved a proposal to raise Rs 8,500 crore through a Qualified Institutions Placement (QIP).

The special resolution was passed via a postal ballot and remote e-voting. The company received overwhelming support, with 99.7% of shareholders voting in favour of the proposal.

Competitive positioning and strategic funding  

The decision comes as Zomato aims to maintain its edge in an industry increasingly characterized by substantial capital inflows.

Rivals such as Swiggy and Zepto, which recently secured substantial funding, have heightened the pressure on Zomato, especially in the fast-growing quick commerce segment.

The company, which has shifted to cash generation from its earlier loss-making status during its IPO days, said that the larger scale of its business and market dynamics necessitated an increase in cash balances.

“While the business is now generating cash... we believe that we need to enhance our cash balance given the competitive landscape and the much larger scale of our business today,” Goyal said in a shareholder letter.

Zomato's cash reserves were reduced by Rs 1,726 crore in the last quarter, primarily due to the Rs 2,014 crore acquisition of Paytm’s entertainment ticketing business.

While the acquisition is part of Zomato's strategy to diversify and expand its offerings, the QIP will ensure the company remains financially resilient as it navigates the competitive landscape of India's food-tech sector.

Strong financial trajectory  

For the July-September quarter (Q2 FY25), Zomato reported a staggering 388.9% increase in profit for the second quarter of FY25, posting Rs 176 crore, a sharp rise from Rs 36 crore in the same period last year.

Notably, its revenue from operations grew by 68.5% year-on-year (YoY), amounting to Rs 4,799 crore in Q2 FY25, up from Rs 2,848 crore in Q2 FY24.