(Bloomberg) — Uber Technologies Inc. sold its 612 million shares in India’s Zomato Ltd. at a discount, marking the ride-hailing giant’s exit from the country’s online food-delivery market following the expiry of an investor lock-up period.
Zomato fell 0.2% to close at 55.45 rupees (0.7 US cents), after dropping as much as 9.5% shortly after opening on Wednesday.
Uber off loaded the shares at 50.44 rupees apiece on Wednesday, BSE exchange data showed, after the stock was offered up in a block trade between 48 rupees and 54 rupees, according to terms of the deal seen by Bloomberg News late Tuesday. BofA Securities was the sole bookrunner of the trade.
Uber’s retreat follows its sale of Uber Eats in India to Zomato in exchange for a 9.99% stake in 2020. Zomato raised $1.3 billion with its offering about one year ago, opening room for a slew of Indian startups that tapped investors through public offerings in the South Asian country. But the shine has come off and their shares have retreated as doubts persist about the valuations of loss-making technology firms.
Zomato, which is renaming itself to Eternal Ltd. and appointing new management, also saw its stock plummet last week following the end of its early investor lock-up. Pre-IPO investors in the New Delhi-based company include China’s Ant Group Co., Info Edge India, Uber and Sequoia Capital.
Indian daily Business Standard first reported on Tuesday that Uber is the holder disbursing the shares. A spokesman for Uber didn’t immediately respond to a request for comment.
Zomato shares jumped 20% on Tuesday, the most since its debut last year, as a number of block trades changed hands after it released its quarterly performance report. The result showed a smaller-than-expected loss and revenue in line with analyst expectations. Indian exchange data on Wednesday showed Fidelity’s emerging markets fund buying up 54.4 million shares, while ICICI Prudential Life Insurance Co. Ltd. purchased 45 million.
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