Uber sells 7.8% stake in India's Zomato for US$390m
Uber Technologies sold its minority stake in Indian food-delivery company Zomato for about US$390 million in a block trade on Wednesday (Aug 3), according to data from India’s BSE stock exchange.
The San Francisco-based company sold 612.2 million shares, or 7.8 per cent stake, in New Delhi-based Zomato, for 50.44 rupees (S$0.88), or about 64 US cents a share, according to a list of bulk deals from the Exchange.
The sale represents an exit from the Indian food-delivery market for Uber, which sold its Uber Eats unit in the region to Zomato in 2020 in return for a stake in the startup.
Uber has held stakes in companies including Didi Global and Grab Holdings as a way to maintain a presence in certain markets where competing with local rivals proved costly.
Offloading the stake “may be a precursor to exiting from more unprofitable delivery markets,” wrote Bloomberg Intelligence analyst Mandeep Singh. “The sale will help offset Uber’s US$3.1 billion cash burn in that segment since 2018.”
Uber reported second quarter results on Tuesday showing a net loss of US$2.6 billion due to unrealised losses from stakes in Grab, Aurora Innovation and Zomato. Chief executive officer Dara Khosrowshahi has said the company will be looking to monetise non-strategic stakes over time.
Still, Uber jumped after the earnings report and extended gains on Wednesday, with analysts at Raymond James upgrading the stock to outperform and citing strong momentim in the company’s rides business, combined with attractive valuations.
Uber traded 3.5 per cent higher in New York at 10.50 am. Zomato closed at 55.45 rupees on Wednesday in Mumbai after dropping as much as 9.5 per cent earlier that day. BLOOMBERG
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