Shares of Indian food delivery app Zomato Ltd crashed up to 9.6% in opening trade on the BSE following reports Uber Technologies Inc (NYSE: NYSE:UBER) is looking to sell its entire stake in the firm for up to $373 million. The offer price range for the deal stood between INR48-54 per share, the report stated citing merchant banking sources.
Block Deal: On Wednesday, about 12.1 million shares were exchanged in a block deal priced at INR52.5 in pre-open trade, according to Refinitiv Eikon data, Reuters reported.
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Price Movement: The stock fell to as low as INR 50.25 on the BSE early Wednesday before recovering the losses. Zomato shares were trading at INR54.25, down 2.43%.
Earnings: Zomato’s net loss had narrowed to INR 186 crore in the quarter-ended June while its consolidated revenues surged over 67% compared to the same period a year ago. Following the earnings release, shares of the food delivery app had surged over 18% on Tuesday.
Zomato is also backed by Jack Ma-cofounded Chinese e-commerce giant Alibaba (NYSE:BABA) Group Holding Ltd. (NYSE: BABA).
Analyst Take: B&K Securities reportedly said — by their estimates — Zomato continues to widen its market share gap. “Zomato remains a disruptor in the space and continues to expand its restaurant ecosystem approach. The increase in contribution margin reflects the ability to control costs when revenue leverage is in place. We will continue to watch closely for the continuation of these trends and believe the strong trends demonstrated this quarter will come under pressure,” it said.
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