NEW DELHI: China’s Alibaba Group Holding Ltd is planning to sell nearly 3% stake via block deal in foodtech major Zomato to mop up about $200 million. The block deal, expected to take place on Wednesday, will see Alibaba Group offering shares at a 5-6% discount to Tuesday’s close price, according to reports. Morgan Stanley would be the sole broker to the deal. On Tuesday, shares of Zomato closed 1.63% lower at ₹63.35 apiece on the NSE.
Alibaba, promoted by Jack Ma, held a 12.98% stake in Zomato as of 30 September. Post the deal, Alibaba stake will come down to 10% stake in the food delivery company. Earlier in August this year, Uber Technologies sold its 7.8% stake in Zomato for $392 million via a block deal on local exchanges.
Following the expiry of the one-year mandatory lock-in period for pre-IPO investors, similar block deals have been taking place in tech firms such as Nykaa, Paytm, and Policy bazaar.This stake sale by pre IPO investors is having a catastrophic impact on the share prices of new age firms.
Most new-age stocks are trading well below their IPO prices and when compared with 52-week highs, these stocks are trading at a discount of 50-75%. Zomato, for example, had raised ₹9,375 crore through an IPO in July last year at an issue price of ₹76 per share.