NEW DELHI: Ride-hailing giant Uber is likely to sell its 7.8% stake in food delivery firm Zomato on Wednesday via a block deal, according to a source familiar with the development. The block deal offer is pegged at nearly Rs 2,938 crore or $373 million with a price range of Rs 48-54 per share. Uber is likely to put 61.2 crore total outstanding shares on the block, which translates to a 7.8% stake in Zomato.
According to the source, Bank of America Securities is the book runner for the deal. The rumours about the stake sale came on the day Uber Technologies Inc in its Q2CY2022 results said that it lost $245 million on its Zomato investment during the quarter and $707 million in the first half of the year. Uber’s losses in the June ending quarter came in at $2.6 billion but it turned cash flow positive for the first time.
Uber’s $1.7 billion loss was from investments and a reevaluation of stakes in Zomato, Aurora and Grab, the company said. To note, Zomato’s market capitalization has fallen from Rs 98,849 crore on its listing day to Rs 43,777 crore on Tuesday.
Uber had sold Uber Eats, its food delivery business, in India in an all-stock transaction to Zomato in 2020 for a 9.99% stake after competing fiercely with Swiggy and Zomato for years. Currently, Uber holds 7.78% in Zomato and is its second-largest stakeholder, only after Info Edge (India) which owns over 15% stake in the company.
The query sent to Uber on the stake sale was not answered till the time this story was published. Zomato shares closed at Rs 56 on the BSE on Tuesday as the stock gained 20% during the trading session- its best single-day rally in a very long time. The increased demand for the stock came after the company reported narrowing its net losses by 48% to Rs 186 crore in the June quarter. Zomato has said it aims to reach EBIDTA breakeven by the Q4 of next year.