Zomato, the renowned foodtech startup, has witnessed a significant increase in stakes from sovereign funds in Kuwait and Singapore. Notably, the Kuwait Investment Authority acquired 88 million shares in the September quarter and further strengthened its position by adding 6.7 million more shares in the December quarter. Concurrently, Singapore’s sovereign fund, Temasek, acquired 95 million shares during the same period, adding to its existing 169 million shares through its investment arm.
Mutual Funds Double Down
In addition to sovereign funds, mutual funds in India have also shown confidence in Zomato by doubling down on their stakes. As of December 2023, mutual funds held a 12.34% stake in the company, nearly doubling from the 5.72% stake they owned in the previous year. This surge in support from institutional investors comes at a time when prominent players like Tiger Global and SoftBank are making complete exits from their Zomato investments.
Zomato: Kuwait Investment Authority’s Strategic Moves
The Kuwait Investment Authority’s strategic moves reveal a notable interest in Zomato’s growth potential. With the acquisition of 88 million shares in the September quarter and an additional 6.7 million shares in the December quarter, the sovereign fund signals its confidence in the foodtech giant’s trajectory. The specifics of Kuwait Investment Authority’s investment strategy and the total stake it now holds in Zomato remain undisclosed.
Zomato: Temasek’s Incremental Investment
Temasek’s incremental investment in Zomato, acquiring 95 million shares in the December quarter, adds to its already substantial holding through its investment arm. The sovereign fund’s confidence in Zomato’s performance aligns with the startup’s global expansion and innovative strategies. The total stake held by Temasek after this acquisition further solidifies its position as a key player in Zomato’s investor landscape.
The surge in stakes from Indian mutual funds reflects growing confidence in Zomato’s long-term prospects. With their stake doubling to 12.34% by December 2023, mutual funds contribute significantly to the overall institutional support for the foodtech company. The motivations behind this increased confidence, including Zomato’s financial performance and strategic initiatives, will be crucial to understanding the dynamics of this emerging trend.
Tiger Global and SoftBank Exits
While sovereign funds and mutual funds are actively increasing their stakes, Zomato has experienced exits from major institutional investors. Tiger Global, a prominent venture capital investor, made a complete exit by selling 12.24 crore shares in August of the previous year. The exit, totaling INR 1,123.84 crore, saw Societe Generale, Kotak’s midcap fund, Axis Mutual Fund, and Morgan Stanley Asia Singapore among the buyers of the offloaded shares.
SoftBank’s Strategic Exit
In a strategic move, SoftBank, led by Masayoshi Son, sold 9.35 crore shares of Zomato in a block deal worth INR 1,127 crore. This exit, carried out by SoftBank’s investment vehicle SVF Growth (Singapore), marked the end of its investment journey with the Delhi-NCR based foodtech giant. The shares were acquired by Invesco, ICICI Prudential Insurance, Goldman Sachs (Singapore), Kadensa Capital, Morgan Stanley Asia Singapore, and others.
The recent offloading of Zomato shares by Motilal Oswal Mutual Fund, resulting in a block deal of INR 621.6 crore, led to a 3% dip in the company’s shares. As of January 20, 2023, Zomato’s shares traded at INR 130.10 at the closing bell. The evolving investor landscape, with sovereign funds and mutual funds strengthening their positions, raises questions about Zomato’s future strategies and potential global expansion plans.
In conclusion, Zomato’s changing stake landscape reflects a dynamic shift in investor confidence, with sovereign funds and mutual funds becoming key players. While major exits from Tiger Global and SoftBank have marked the recent past, the influx of investments from Kuwait and Singapore suggests a positive outlook for Zomato. As the company navigates these changes, industry observers eagerly anticipate its strategic moves and the impact on the broader foodtech ecosystem.
