Zomato’s CEO Deepinder Goyal has finally spoken on the criticism around his company’s acquisition of Blinkit, the grocery delivery app which was formerly known as Grofers. In a letter to the shareholders, he laid out the reasons why and how the acquisition will not just benefit the company, but also everyone associated with it including all shareholders and investors.
“The objective of good corporate governance is to protect the rights of minority shareholders.
The ultimate test of corporate governance for this transaction was the requirement of approval from at
least 75% of our voting shareholder base. The outcome was that 97%+ of the shareholders’ votes were in
favor of the transaction.”, Deepinder wrote in the letter.
He further wrote, “Also, if it is a bad deal for other shareholders, it would be equally bad for me as a shareholder. My financial outcomes are 100% aligned to other shareholders (100% of my compensation is stock linked; I don’t even draw any fixed salary).”
Before settling on Blinkit, the business objectively assessed all of the potential acquisition targets in the rapid commerce sector, and it made sure that thorough and in-depth due diligence, consideration, and discussions were conducted before agreeing to the terms of the transactions. Zomato received assistance from a number of external consultants with various aspects of the transaction, including the valuation, which was carried out by EY, and subsequently obtained an impartial fairness assessment from Morgan Stanley.
Speaking on his relationship with Albinder, the founder of Blinkit (originally Grofers), Deepinder said, “the relationship between Albinder and Akriti/ I is public and already known – there was nothing
to hide there. The board was aware of it and all parties, including Akriti herself, made sure that she was
never involved in any discussions or decisions with respect to the transaction. This transaction also had
no overlap with her role as Chief People Officer at Zomato. We also took an independent opinion from
Saraf & Partners on there being no related party transaction under applicable law.”
The letter also contained Zomato’s quarterly results and figures. Zomato reported a net loss of 186 crore rupees for the quarter that ended in June 2022 as opposed to 356 crore rupees a year earlier. Zomato stock increased 18.44% today to settle at Rs 54.90 on BSE, up from yesterday’s close of Rs 46.35. Today, the large-cap shares began trading at Rs 50, up 7.87 percent. The stock has dropped 61% in 2022 and 61.57% in a single year.