Food delivery app Zomato's announcement to acquire Blinkit or Blink Commerce Pvt Ltd (formerly known as Grofers) last week has caused a strong plunge as its shares fell around by 8 percent on Tuesday, 28 June. The company also witnessed a fall by over 6 percent on Monday.
The total loss in market capitalisation amounts nearly to $1 billion, reported news agency Reuters.
Zomato Ltd announced on Friday that it will acquire Blink Commerce Pvt Ltd in a share swap deal for Rs 4,447.48 crore. This development comes as a strategy of investment in highly competitive quick commerce market.
Since, the announcement of the deal, Zomato's shares have fallen around 14 percent.
In the view of the Zomato – Blinkit deal, Shivam Bajaj, Founder and CEO at Avener Capital said that "this high cash burning sector houses fierce competition from the likes of Zepto, Dunzo, Swiggy Instamart, BigBasket, etc and it will be interesting to see how this expensive investment by Zomato pans out in the future."
The deal encompasses the acquisition of up to 33,018 equity shares of Blink Commerce Pvt Ltd by Zomato. The price of per equity share is Rs 13.45 lakh, said Zomato.
The transaction will be carried out through issuance and allotment of up to 62.85 crore fully paid-up equity shares of Zomato having face value of Rs 1 each at a price of Rs 70.76 per equity share on a preferential basis, the company added.
(With inputs from PTI and Reuters.)
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