Prodded By SEBI, Zomato Issues Another Clarification On Blinkit Acquisition. 2022

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Zomato Issues Another Clarification On Blinkit Acquisition.

Zomato said the startups was asked by SEBI to file a response on stock exchanges to concern raised in media reports about the Blinkit acquisition. The startups said the value of the deal should include only the consideration paid for the purchase of the proposed acquisition targets and not include future investment.

Zomato blamed investor for not completing the required online registration process to generate a link to attend its June 25 acquisition conference call.

Read Also : Blinkit estimates July losses at INR 92.9 Cr

Zomato Issues Clarification On Blinkit Acquisition

Food tech startup Zomato issued anothers clarification on Tuesday Aug 2 on its acquisition of fast trading startup Blinkit following instruction from the Securities and Exchange Board of India SEBI.

In a filing to stocks exchange, Zomato said that SEBI, through an email dated August 1, had asked the startups to submit a response on stock exchanges to the concern raised in the report of the media about the Blinkit acquisition.

Zomato said that the deal value for the acquisitions of Blinkit was INR 4,500 Cr & not INR 7,500 Cr as calculated by some media reports. He called the concern about the issue factually incorrect.

Zomato had acquired Blinkit for $568Mn in a share deal in June this year.

In addition to the value of the deal, Zomato said that he would also take on the net debt of INR 673.1 Cr on the book of the target companies Blinkit and the warehousing & ancillary services business of Hands on Trades Private Limited HOTPL.

The food delivery startup said the value of the deal should include only the consideration paid for the purchase of the proposed acquisition targets and should not include any future investment in the acquisition targets by Zomato.

He said many media reports had counted his future investments in Blinkit and the loan given by him to the fast trading start-up at the wrong deal value of INR 7,500 Cr.

Blinkit acquisition

This is Zomato’s second such clarification on the Blinkit acquisition in two days. In the shareholder letter published alongside the startup’s financial statements for the April June 2022 quarter on Monday Aug 1, Zomato founder and CEO Deepinder Goyal addressed criticism received by the company over corporate governance issues regarding its acquisition. .

On question raised about the relationship between Blinkit founder Albinder Dhindsa and Zomato co founder Akriti Chopra, Goyal said there was nothing to hide about Chopra and Dhindsa’s marriage and the board was aware.

All parties, including Akriti herself, made sure that she was never involved in any discussion or decision regarding the transaction. We also received an independent opinion from Saraf & Partners that a related party transaction does not exist under applicable law, the CEO said.

On the matter of denying retail investors access to the June 25 investor call on the Blinkit acquisition, Zomato hinted Tuesday that many of those investors failed to complete a mandatory online registration process to generate a link to the conference call.

There was a registration process that needed to be completed after which shareholder would be provided with a link to join the call. Therefore, from our side, there were no restrictions on retail shareholder participation in the conference call. and indeed several retail shareholders attended the conference call, the document says.

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