29-Nov-2023
2 mins read
Alipay, a key player in the digital payments domain under Ant Group’s ownership, has made headlines with its strategic move to sell off its stake in Zomato, the prominent online food delivery platform. Alipay has decided to offload a significant portion of its Zomato shares, amounting to approximately 296 million shares, in a block deal. This move is anticipated to raise around Rs 3,290 crore (US$ 395 million) for Alipay. The shares are expected to be sold at Rs 111.28, a slight 2.2% discount to the Zomato’s shares’ previous day’s closing price.
Trade Arrangements and Participating Entities
The trade manoeuvre is being facilitated by reputed entities in the financial domain, namely Bofa Securities India and Morgan Stanley. Currently, Alipay holds a 3.44% stake in Zomato, while another entity under Ant Group, Antfin Singapore Holdings Pte, owns a 6.39% stake.
Alipay’s Departure in the Context of Market Trends
This divestment by Alipay echoes a series of similar moves made by other investors in Zomato. Notably, Softbank Group recently executed a partial stake sale in Zomato, divesting 1.1% of its stake for Rs 1,200 crore. These developments have occurred against the backdrop of Zomato’s impressive market performance, with its share price escalating by 80% over the past year, reaching Rs 113.80 from Rs 62.05.
Previous Stake Sales by Diverse Investors
SoftBank’s Svf Growth (Singapore) Pte, Tiger Global-backed Internet Fund III Pte, and DST Global have all previously participated in stake sales, each executing transactions to divest their shares in Zomato. These actions have led to a shift in the ownership landscape of Zomato, with entities like Axis Mutual Fund, SBI Life Insurance Co., ICICI Prudential Life Insurance, Founders Collective Fund, Morgan Stanley Asia Singapore, and Societe Generale acquiring shares in the company through these transactions.
A Reflection on the Market Dynamics
The recent activities surrounding Zomato’s stake movements portray a dynamic market scenario where key stakeholders are adjusting their positions and portfolios. These manoeuvres signify a strategic realignment of investments and interests within the food delivery aggregator space.
In summary, Alipay’s decision to exit Zomato through a block deal adds to the series of stake sales by major investors in the company. This move not only reflects the changing dynamics within Zomato’s ownership but also showcases the ongoing realignment of interests and investment strategies in the thriving online food delivery industry.