Antfin Singapore, a subsidiary of Chinese fintech giant Ant Group, sold shares worth approximately ₹47.72 billion ($570 million) in India’s largest food delivery platform Zomato. This move has nearly halved Antfin’s stake in the company, dropping it from 4.3% to 2.2%. The sale marks Antfin’s second major divestment in Zomato this year, wherein it has encashed decent returns both those times.
Antfin Singapore’s involvement in Zomato dates back to 2018 when it began investing in the food delivery company as part of its broader strategy to expand its presence in India. Over the course of several funding rounds between 2018 and 2020, Antfin invested a total of approximately ₹3,246 crore into Zomato. By the time of Zomato’s initial public offering (IPO) in 2021, Antfin Singapore had become one of the company’s most significant stakeholders, holding an 8% stake.
However, things became tense due to the worsening diplomatic relations between Beijing and New Delhi, primarily due to ongoing border disputes and India’s subsequent scrutiny of Chinese businesses. This led to a deterioration in diplomatic relations, and in response, India has taken steps to limit Chinese influence in its economy, particularly in strategic sectors like technology, finance, and e-commerce. The Indian government has imposed stricter regulations on Chinese investments, leading to increased scrutiny of companies like Ant Group.
As a result, Antfin, along with other Chinese investors, has faced increasing regulatory hurdles, prompting a reassessment of its investments in the country. The most recent stake reduction follows a similar move earlier this year, in March, when Antfin offloaded 2.1% of its shares in Zomato, further reducing its stake in the company.
The recent sale involved two block deals where Antfin Singapore sold shares at 257.46 rupees and 257.17 rupees per share. Both transactions were executed at a discount compared to Zomato’s closing price of 263.12 rupees on the Bombay Stock Exchange (BSE) that day. The total sale of 18.54 crore shares, or approximately 2.14% of Zomato’s equity, raised nearly $570 million for Antfin. This sale follows a pattern of divestment by Ant Group in Zomato over the past year. Apart from the one in March, there was another divestment last year, when another subsidiary of Ant Group, Alipay, completely divested its 3.44% stake in Zomato.
Despite the challenges faced by Chinese investors like Antfin, Zomato has continued to perform well in the Indian market. This year, the company’s shares have more than doubled in value, driven largely by the success of its quick commerce unit, Blinkit, which delivers groceries and other household items to urban consumers. The growing demand for quick commerce has become a major driver of Zomato’s growth, with brokerage firm UBS estimating Blinkit’s value at $15.4 billion, surpassing the value of Zomato’s core food delivery business. Zomato’s ability to diversify its offerings and expand into new markets has made it an attractive investment for both domestic and international investors. The company’s recent financial performance has exceeded expectations, with a 27% growth in its food delivery business and even stronger growth in quick commerce as well.
