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After Uber, Tiger Global divests partial stake in Zomato

Credit: VCCircle

Investment giant Tiger Global has sold over 184 million shares of food delivery service Zomato Ltd, representing a 2.34% stake in the company over the last few trading sessions, the investor said in a stock exchange filing. 

Tiger Global said that it sold the Zomato shares between 25 July and 2 August in the open market. After the sale, Tiger Global now holds a 2.77% stake in the company, the filing shows. 

While the filing did not disclose the sale proceeds that Tiger received, based on Zomato’s average closing stock price of Rs 46.80 apiece between 25 July and 2 August, Tiger Global is likely to have sold shares worth Rs 863 crore (around $109 million).

With this sale, Tiger Global joins investors such as Uber and Moore Strategic Ventures which have sold shares of Zomato in the past few days, after the 12-month lock-in period for pre-IPO shareholders ended on 23 July. 

On 3 August, Uber, the second biggest shareholder of Zomato, sold its entire 7.78% stake in through block deals for Rs 3,088 crore. The US ride- sharing firm sold its shares at a price of Rs 50.44 to Fidelity and ICICI Prudential Life Insurance Co Ltd. 

On 26 July, Moore Strategic Ventures Llp sold its entire Zomato stake for Rs 187.1 crore. Moore sold its shares at Rs 44 apiece. 

The investors that have sold Zomato shares post the 12-month lock-in period have taken a hit on the potential profits that they could have generated from Zomato stock, given the price correction that the company has seen in recent months as a result of risk-off investor sentiment for technology stocks globally. 

Zomato which concluded its IPO at an issue price of Rs 76 apiece in July last year, went on to hit an all-time high of Rs 169 per share in November. On Thursday, the stock closed at Rs 57.75. Last month it hit a low of Rs 41.65 apiece.

While Moore Strategic Ventures sold its shares at a loss of Rs 4 crore, according to an analysis by Moneycontrol.com, Uber sold its entire stake at a profit. 

As per Mint’s analysis from Zomato’s IPO prospectus, shares were allotted to Uber at a price of Rs 22.47 apiece.

In the case of Tiger Global, shares were allotted at two different prices of Rs 44.81 and Rs 58.20 in end-2020 and early 2021, Zomato’s IPO prospectus shows.

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