The partnership between the Indian Railway Catering and Tourism Corporation Ltd (IRCTC) and Zomato represents a significant advancement in enhancing the dining experience of railway passengers in India. This strategic collaboration aims to broaden the array of food options available to passengers through IRCTC’s E-Catering segment, catering to the diverse culinary preferences and dietary needs of travelers. The partnership was unveiled as a Proof of Concept (PoC) at five key railway stations: New Delhi, Prayagraj, Kanpur, Lucknow, and Varanasi. This initiative allows passengers to pre-order meals through the IRCTC E-Catering portal, with Zomato assisting in the supply and delivery.
Following the announcement of this partnership, Zomato’s share price reached a 52-week high of ₹115 on October 18, indicating a positive market response. This upsurge is seen as a strategic expansion for Zomato, broadening its customer base significantly. Zomato’s stock performance has been impressive, showing a 12% increase over the past month and a notable 111.91% rise over the last six months. This growth is partly attributed to the increased stake of foreign (FIIs) and domestic (DIIs) entities in Zomato, with FIIs raising their stake to 54.7% and DIIs to 13% in the second quarter of the fiscal year 2024 (Q2FY24). Zomato also reported a significant year-on-year growth in its revenue from operations, reaching ₹2,416 crore in Q1FY24, a substantial increase from ₹1,414 crore in the corresponding period the previous year.
In a related financial development, Tiger Global, a major US-based investment firm, sold its entire stake in Zomato for ₹1,123.85 crore, which included about 12.35 crore shares at an average price of ₹91.01 per share. Additionally, DST Global, through Apolleto Asia Ltd, also divested around 3.2 crore Zomato shares for ₹288 crore at an average price of ₹90.10 per share.
This partnership between IRCTC and Zomato is a significant step in enhancing the travel experience for railway passengers in India, providing them with more diverse and convenient meal options. The financial implications for Zomato have been positive, as evidenced by the rise in its stock price and increased interest from investors.