Zomato Shares Surge 6 Per Cent. Here's Why

Shares of Zomato soared as much as 6 per cent in early trade on Monday, fueled by two major developments, its inclusion in the benchmark BSE Sensex and shareholder approval for a Rs 8,500 crore Qualified Institutional Placement (QIP). The stock was trading at Rs 279.16 on the NSE.Zomato has become the first new-age tech company to be included in the 30-stock BSE Sensex, replacing JSW Steel. This change, effective December 23, comes as part of a reconstitution of key indices announced by Asia Index Private Limited, a wholly-owned subsidiary of the BSE. The inclusion highlights Zomato's impressive market performance, with the stock rallying over 113 per cent this year. Apart from the flagship Sensex, the company has also secured spots in the BSE 100, BSE Sensex 50, and BSE Sensex Next 50 indices.Zomato's shareholders have approved the Rs 8,500 crore QIP, a move aimed at strengthening the company's financial position. Last month, the board greenlit this fundraising initiative to support its balance sheet amid evolving market dynamics.The company's cash reserves saw a dip of Rs 1,726 crore in the September quarter, following its Rs 2,014 crore acquisition of Paytm’s entertainment ticketing business. As of now, Zomato holds a cash balance of Rs 10,800 crore, down from Rs 14,400 crore following significant investments in quick commerce and acquisitions.Zomato has highlighted its focus on maintaining service quality and ensuring a level playing field in a competitive landscape. The company has also guided for steady margins in its core food delivery business and is nearing adjusted EBITDA break-even for its quick commerce segment.Looking ahead, Zomato has ruled out further minority investments or acquisitions in the near term, underscoring its commitment to optimising resources and achieving sustainable growth. The developments underscore Zomato's evolution from a start-up to a significant player in India's capital markets and its focus on adapting to an increasingly competitive and capital-intensive market.