In a significant shift in the tech investment landscape, Ant Group’s Alipay is poised to exit its stake in the Indian food delivery giant, Zomato, through a $395 million block deal. This strategic move marks a substantial change in the shareholder dynamics of one of India’s leading tech enterprises.
Sale Details
Alipay, a unit of the Chinese conglomerate Ant Group, is set to offload its entire 3.4 percent stake in Zomato. This translates to a massive sale of approximately 296 million shares. The shares, according to market sources, are priced at ₹111.28 each, aiming to raise a substantial sum of ₹3290 crore, equivalent to about $395 million.
Market Impact and Company Performance
This development comes as Zomato’s shares have shown remarkable resilience and growth, gaining over 88% in the year 2023. This growth is a significant rebound from the decline the company faced in 2022, reflecting a strong investor confidence and market performance of Zomato.
Facilitators of the Deal
The deal is being facilitated by Bofa Securities India Ltd and Morgan Stanley, acting as the intermediaries for this substantial transaction. The sale is conducted through block deals on Indian stock exchanges, a method typically used for large transactions conducted at a negotiated price between parties.
Background of Alipay and Zomato
Alipay, known for its dominant role in the Chinese digital payments sector, is a part of the Ant Group, a major player in the global tech industry. Zomato, on the other hand, has established itself as a leader in the food delivery service in India, competing with other giants in the sector and expanding its services beyond mere food delivery.
Strategic Implications
This exit by Alipay is indicative of a strategic shift in its investment portfolio. With Zomato’s rising stock value and the current market conditions, the timing of this sale is particularly noteworthy. It reflects Alipay’s decision-making in terms of capitalizing on its investments at a time when the market is favorable.
Conclusion
As the deal progresses, the market is keenly observing the impact of this transaction on Zomato’s stock and the broader tech investment landscape in India. This move by Alipay is not just a financial transaction but a statement on the dynamic nature of tech investments and the ever-evolving market trends in the global tech industry.