Zomato’s stock exhibited resilience, experiencing a modest increase to Rs 117.30, subsequent to a buy recommendation from Citi, which set a target price of Rs 145. This optimistic outlook from Citi comes amid a challenging period for the food delivery company, marked by a more than seven percent dip in its shares post-World Cup. The dip was triggered by the exit of Alipay Singapore Holdings.
Alipay Singapore Holdings sold its entire stake of 29,60,73,993 shares through open market transactions at an average price of Rs 112.70 per share, amounting to Rs 3,336.75 crore. Despite this substantial transaction, Zomato’s stock closed positively at Rs 117.30 on Wednesday, November 29.
In a contrasting move to Alipay’s exit, Morgan Stanley Asia (Singapore) Pte displayed confidence in Zomato by acquiring a new stake in the company. The details of this acquisition align with the price point of Alipay’s sale, suggesting a potential shift in the investor landscape for Zomato.
Amid these developments, concerns are growing about the potential implementation of GST penalties that could increase costs for Zomato’s non-Gold orders by Rs 5 each. This change might inadvertently enhance customer loyalty, encouraging more users to join Zomato’s Gold program to avoid the additional charges.