SoftBank's SVF Growth to sell stake in Zomato for 1020 Cr.

SVF Growth, a major shareholder in Zomato, plans to sell shares at a price range of 109.4 to 111.65 rupees per share, which is 2% lower than the current market value. This comes after Softbank and Tiger Global also sold their stakes in Zomato.

Zomato saw a significant increase in its share value this year but experienced a small decline on Thursday. On Friday, a large amount of shares were exchanged in a block deal, leading to a further decrease in Zomato's share price. SVF Growth Singapore Pte, a subsidiary of SoftBank, is thinking about selling a 1.1% stake in the online food delivery platform. The proposed price range for the shares is between Rs 109.40 and Rs 111.65 per share, with a total estimated value of Rs 1,020 crore.

As of September 30, SVF Growth (Singapore) Pte Ltd held 18,71,38,736 shares, which represents a 2.17% ownership in Zomato. Other significant shareholders include Antfin Singapore Holding Pte (6.51%), Alipay Singapore Holding (3.44%), and Kuwait Investment Authority Fund 601 (1.02%).

ICICI Securities predicts that Zomato's quick commerce business will start making a positive contribution in the second quarter of the fiscal year 2024 and become profitable at the adjusted EBITDA level in the first quarter of the fiscal year 2025. They expect this improvement to be driven by various factors such as cost reductions, increased revenue, and advertising revenue.

The brokerage firm has two different predictions for the value of the shares. In the more positive prediction, the target is Rs 200 per share. In the more cautious prediction, the target is Rs 70 per share. This shows that the potential reward is 2.6 times greater than the potential risk, which is good news for investors.

To summarize, SVF Growth's decision to sell Zomato shares at a lower price is a reflection of changes in the company's ownership. Despite fluctuations in share prices, Zomato's quick commerce business is expected to grow, making it an appealing opportunity for investors.