Zomato Dismisses Shiprocket Acquisition Rumors, Jefferies Remains Bullish on Stock

Zomato's shares opened higher on 22 December, a day after CEO Deepinder Goyal denied reports of the company planning to acquire Shiprocket for USD 2 billion. 

Goyal stated in a post on X (formerly Twitter), "We have noticed that there are certain news articles circulating in the mainstream media with the subject 'Zomato offers to acquire Shiprocket for USD 2 billion'. We deny this statement and would like to caution investors against such incorrect news floating in the market." 

Zomato is currently focused on its existing businesses and has no plans for any acquisition at the moment, according to Goyal. He added, "Kindly note that the company is clarifying this information out of abundant caution, given the large size of the deal mentioned in the news article and the uncertainty that it may create in the market." At 10:00 am, Zomato's shares were trading over 1 percent higher at Rs 128.85 on the National Stock Exchange (NSE). 

Shiprocket is a B2B logistics technology start-up that provides shipping and fulfilment services to direct-to-consumer (D2C) brands and omni-channel sellers across categories such as apparel, electronics, beauty and personal care, and grocery. 

Zomato already owns a 5 per cent stake in the company, following an investment in 2021. Jefferies believes that if the acquisition goes through, Zomato's shares could trade "weak" since it seems like an unrelated acquisition even though quick commerce and hyper pure may have some linkages. 

According to analysts, Zomato has been acquisitive in the past and made a few investments that were seemingly less relevant. The company carries USD 1.4 billion on its books, and existing businesses are not likely to require significant investment. 

On 21 December, Zomato's shares ended 2.2 percent higher at Rs 128.20 on the National Stock Exchange (NSE), and so far in 2023, the stock has given multi-bagger returns, rising up to 112 per cent. In comparison, the benchmark Nifty 50 has risen around 15 per cent.