Zomato block deal! Alibaba to sell shares worth $200 mn tomorrow at 5-6% discount, says report

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Chinese e-commerce giant Alibaba Group plans to sell around 3 per cent stake in Indian food delivery firm Zomato for $200 million, a report said on Tuesday.

CNBC Awaaz quoted sources as saying that Ant Financial and Alipay will reduce their stake in Zomato to around 10 percent each.

According to reports, the block deal will be at a discount of around 5-6 per cent. Morgan Stanley will act as the broker to the transaction.

Alibaba’s partial exit comes at a time when Zomato has experienced senior level departures recently. The company has also started retrenchment to reduce the number of employees by 4 per cent. Zomato co-founder Mohit Gupta resigned earlier this month after nearly five years at the company.

Zomato’s share price has declined by more than 55 percent this year even though the company has experienced rapid revenue growth in recent quarters.

Alibaba has become the latest investor to sell Zomato shares in bulk since the one-year lock-in period ended on July 23 for about 613 crore shares, or 78 per cent of the company’s stock.

Some of the largest shareholders, including Sequoia Capital India, Tiger Global Management, Uber and Delivery Hero, have reduced their stake through block deals or open market operations in August.

On the National Stock Exchange, Zomato closed at Rs 63.35, down 1.63 per cent.

Read also: After Byju’s, Zomato now lays off employees; Nearly 100 jobs affected so far: Report

Read also: Mohit Gupta, co-founder of food delivery firm Zomato, has resigned.

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