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Business News/ Companies / News/  Uber sells stake in Zomato for $390 million

Uber sells stake in Zomato for $390 million

Uber off loaded the shares at 50.44 rupees apiece on Wednesday, BSE exchange data showed

The app of Indian food delivery company Zomato is seen on a mobile phone above its logo displayed in this illustration picture. (REUTERS)Premium
The app of Indian food delivery company Zomato is seen on a mobile phone above its logo displayed in this illustration picture. (REUTERS)

Uber Technologies Inc. sold its minority stake in Indian food-delivery company Zomato Ltd. for about $390 million in a block trade on Wednesday, according to data from India’s BSE stock exchange.

The San Francisco-based company sold 612.2 million shares, or 7.8% stake, in New Delhi-based Zomato, for 50.44 rupees, or about 64 cents a share, according to a list of bulk deals from the Exchange.

A spokesman for Uber declined to comment.

The sale represents an exit from the Indian food-delivery market for Uber, which sold its Uber Eats unit in the region to Zomato in 2020 in return for a stake in the startup. Uber has held stakes in companies including Didi Global Inc. and Grab Holdings as a way to maintain a presence in certain markets where competing with local rivals proved costly.

Offloading the stake “may be a precursor to exiting from more unprofitable delivery markets," wrote Bloomberg Intelligence analyst Mandeep Singh. “The sale will help offset Uber’s $3.1 billion cash burn in that segment since 2018."

Uber reported second quarter results on Tuesday showing a net loss of $2.6 billion due to unrealized losses from stakes in Grab, Aurora Innovation Inc. and Zomato. Chief Executive Officer Dara Khosrowshahi has said the company will be looking to monetize non-strategic stakes over time.

Still, Uber jumped after the earnings report and extended gains on Wednesday, with analysts at Raymond James upgrading the stock to outperform and citing strong momentim in the company’s rides business, combined with attractive valuations. Uber traded 3.5% higher in New York at 10:50 am. Zomato closed at 55.45 rupees ($0.7) on Wednesday in Mumbai after dropping as much as 9.5% earlier that day.

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This story has been published from a wire agency feed without modifications to the text.

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Published: 03 Aug 2022, 08:38 PM IST
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