Zomato to acquire Blinkit in `4,500-cr share swap deal

Online food delivery platform Zomato on Friday said it will acquire Blink Commerce, which runs Blinkit--formerly Grofers-for nearly Rs 4,500 crore in a share swap deal.

Zomato will buy 33,018 equity shares of Blink Commerce from its shareholders for Rs 4,447.48 crore, pricing each share at Rs 13.45 lakh. This transaction will be done through issuance of 62.85 crore equity shares of Zomato, having face value of Re 1 each at a price of Rs 70.76 per share.

Blinkit's largest shareholder SoftBank will receive 28.71 crore shares of Zomato, Tiger Global will take home 12.34 crore shares and South Korean investor DAOL will get 3.66 crore shares.

As part of the transaction, Zomato will also acquire the warehousing and ancillary services business of Hands on Trades.

"Quick commerce has been our stated strategic priority since the last one year. We have seen this industry grow rapidly both in India and globally, as customers have found great value in quick delivery of groceries and other essentials. This business is also synergistic with our core food business, giving Zomato the right to win in the long-term," said Zomato founder & CEO Deepinder Goyal in a letter to the shareholders.

In March this year, the Zomato board had approved granting a loan of up to $150 million to Blinkit. Last year it had invested $100 million for acquiring around 9 per cent stake in Grofers.

Despite the revenues growing, Blinkit has been reporting heavy losses. The net loss of Grofers had widened 42 per cent to Rs 637.4 crore in 2019-20 from Rs 448 crore the previous year. Though quick commerce is a fast growing category, the company has been burning cash to compete with players like Swiggy Instamart and Zepto.

Zomato had earlier said that it will invest up to $400 million in cash in quick commerce in India over the next two years.