Food delivery aggregator Zomato has finally initiated its Qualified Institutional Placement (QIP) issue, with the goal of raising ₹8,500 crore (~$1Bn). The issue opened on Monday, November 25, following approval from the company’s board of directors. The floor price for the QIP has been set at ₹265.91 per share, approximately 2.8% below the stock’s current market value.
The funds raised through this QIP will primarily support Zomato’s quick commerce unit, Blinkit. According to the company’s filings, ₹2,137 crore will be allocated toward establishing and managing dark stores and warehouses, which are crucial for improving delivery times and scaling operations. Blinkit, which specializes in fast deliveries and has a presence in the domestic quick-commerce segment, aims to increase its network to 1,000 dark stores by the end of the current fiscal year, as well as double that figure by 2026.
In addition to this, funds will also be deployed to strengthen the company’s market presence. This will be done through driving investments in advertising, marketing, and branding initiatives, as well as improving Zomato’s tech infrastructure (including its cloud capabilities). A total of ₹2,492 crore will be deployed towards promotional initiatives across the company’s offerings. In addition to announcing the QIP, Zomato disclosed that its CEO and co-founder, Deepinder Goyal, has extended his salary waiver until March 31, 2026. This extension mirrors a prior decision in 2021, where Goyal opted to forgo his salary for 36 months.
The announcement of the QIP coincided with a sharp rise in Zomato’s share price, which gained 7.6% on the day, marking its highest level in over three months. Shares peaked at Rs 284.34 on the NSE before closing at Rs 273.31, up 3.45% from the previous close. Zomato’s shares are currently priced at ₹274.66, which is still more than the floor price of the QIP. Overall, Zomato’s stock has clocked a strong annual growth, increasing by 120.5%. Over the past year, Zomato’s shares have risen by 140.1%.
This development comes at a time when the Indian quick commerce sector is witnessing rapid growth and intensifying competition. The market is valued at $3.34 billion this year and is expected to reach $9.95 billion within a period of five years (clocking a CAGR of more than 4.5% during the period). Blinkit’s rivals include the likes of Zepto and Swiggy Instamart, and both are expanding their operations. Zepto aims to have a network of 700 dark stores by FY25, while Swiggy Instamart plans to increase its count from 557 to 741.
