Is Uber exiting Zomato by putting its entire 7.8% stake on the block?

Uber, according to sources, is said to be putting its entire 7.8 per cent stake in restaurant aggregator Zomato on the block. The ride-hailing congregator obtained this stake when Uber Eats' India business was acquired by Zomato in January 2020 in a non-cash deal. The deal was then valued at Rs 1,376 crore.

According to a term sheet, a total 612 million shares of Zomato would be up for sale at a price band of Rs 48- Rs 54 a piece. At the lower end, the share sale would fetch Rs 2,939 crore, while at the top end, the deal size could be Rs 3,305 crore. This block transaction is likely to take place on Wednesday.

Shares of Zomato last closed at Rs 55.6 apiece, up 20 per cent over the previous day’s close.

California-based Uber may make anywhere between 2.14x and 2.4x on its Zomato deal. The decision to sell its stake in Zomato comes within a week after the one-year post-IPO lock-in on Zomato shares ended. The sole investment bank handling the share sale is BofA Securities.

Currently, Zomato’s shares are down 27 per cent over its IPO price of Rs 76 per share. Following its listing, the stock had more than doubled to touch a record high of Rs 169.

Through its maiden share sale, Zomato had raised Rs 9,000 crore in fresh capital. Only early-stage investor Info Edge had parted with a small portion of its stake worth Rs 375 crore in the IPO.

Besides Uber, China’s Alipay and Antfin held a 7.1 per cent and a 6.99 per cent stake, respectively, in Zomato at the end of the June 2022 quarter. Info Edge’s shareholding stood at 15.17 per cent. Tiger Global’s Internet Fund held 5.11 per cent and Sequoia Capital held 5.1 per cent.