Updated: Jul 23
Zomato, a leader in online meal delivery, has given the go-ahead for the all-stock acquisition of Blinkit for Rs 4,447 crore. The quick delivery eCommerce platform, formerly known as Grofers, will be acquired, the company stated in a regulatory filing. According to a BSE filing, Zomato will purchase up to 33,018 equity shares of Blink Commerce Pvt Ltd (BCPL) through the acquisition. It had been predicted that the Zomato Blinkit deal would take place today for months.
At its meeting today, which was held on June 24, 2022, the board of directors of Zomato Limited, among other things, "has considered and approved the...acquisition of up to 33,018 equity shares of Blink Commerce Private Limited (formerly known as Grofers India Private Limited) for a total purchase consideration of Rs 444,747,84,078 for Rs 13,46,986.01 per equity share by issuance and allotment of up to 62,85,30,0
HERE IS EVERYTHING YOU NEED TO KNOW ABOUT THE ZOMATO BLINKIT DEAL:
- CEO Deepinder Goyal stated that Zomato's current food company is steadily progressing towards profitability, making its entrance into the next big category timely. "In the last four years, Zomato has expanded at a CAGR of 86% to an adjusted
Revenue of Rs 55.4 billion ($710 million), with an increased adjusted EBITDA margin from (153%) in FY19 to (18%) in FY22, the executive stated. However, Blinkit's sales increased from Rs 200 crore in FY21 to Rs 236 crore in FY22.
- Zomato is prepared to endure up to $400 million in losses for Blinkit and has already loaned the company $150 million. We extended Rs 1,125 crore in loan to Blinkit, of which Rs 575 crore is still available in cash with Blinkit. Zomato will purchase this debt as part of the deal. According to the strategy, we now have an additional Rs 1,875 crore available for potential future investments in rapid commerce, according to Zomato founder Deepinder Goyal.
Goyal added that a sizable portion of these funds will go toward covering Blinkit's losses. The Rs 12,219 crore in cash that was on our balance sheet as of March 31, 2022, would be used to pay for this capital, he continued.
Albinder Dhindsa, the creator of Blinkit, will continue to lead the team and administer the company, according to Zomato. To complete the Zomato Blinkit transaction, up to 62.85 crore equity shares will be issued and allocated on a preferential basis for consideration other than cash. The Blinkit app and brand will remain independent of Zomato. According to Goyal, the Zomato brand is synonymous with all things "food" in the minds of consumers, whereas Blinkit is working to establish itself as a name associated with groceries and other necessities.