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Home / Companies / News /  Zomato deal for 9.3% stake in Grofers gets CCI nod

The Competition Commission of India (CCI) has approved Zomato's bid for acquiring 9.3 per cent stake in the online grocer Grofers and Hands on Trades. This would mark the food delivery aggregator's entry into online grocery retail, a segment that has seen significant growth during the pandemic.

"CCI approves proposed combination involving acquisition by Zomato Limited (Zomato) of approximately 9.3 per cent stake in each of Grofers India Private Limited (Grofers India) and Hands on Trades Private Limited (HoT) along with certain rights in each of the targets," CCI said in a statement on Friday.

Grofers is one of the major contenders in the online grocery retail space. Meanwhile, Hands on Trades is a B2B wholesale entity under its parent Grofers International Pte Ltd formed to procure products from brands and manufacturers.

Zomato had recently invested $100 million for acquiring a minority stake in grocery delivery platform Grofers. The intention is to add a grocery delivery section on its app.

Owing to rise in demand, on account of limited personal mobility due to Covid-19, online grocery retail segment saw giants like Amazon and Flipkart, along with Reliance Industries, BigBasket, Grofers and Dunzo duke it out for a piece of the pie. Aggregators like Zomato and Swiggy too tried their luck in the segment, with the latter outpacing the former.

Now, Zomato is trying to get back into the online grocery game, right after an immensely successful IPO.

"It (grocery) is a large opportunity. The online grocery is nascent right now but is growing rapidly not just in India but across the world... We are actively experimenting in that space and recently invested $100 million for a minority stake in Grofers, with the idea of getting more exposure to that space and building our strategies and plan around that business," Zomato CFO Akshant Goyal had said in July.

"We are very soon launching online grocery on the Zomato app and that will go live soon, and with that we will foray into the space and will see how fast, how rapidly scale it," he had added.

Earlier this week, the Deepinder Goyal-led company reported a sharp increase in loss for the June quarter in its first financial results after the market debut. Loss widened to 360.7 crore in the quarter ended 30 June from 134.2 crore in the preceding three months because of an expanded Employee Stock Ownership Plan (ESOP) pool.

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