Shares of Zomato fell by over 6 p.c on Monday after announcement that the net meals supply platform will purchase Blink Commerce (previously generally known as Grofers) for Rs. 4,447.48 crore.

The inventory declined 6.40 p.c to settle at Rs. 65.85 on the BSE. During the day, it fell 7.53 p.c to Rs. 65.05. At the NSE, it went decrease by 6.59 p.c to settle at Rs. 65.85 a chunk. Zomato on Friday mentioned it is going to purchase Blink Commerce for Rs. 4,447.48 crore in a share swap deal as a part of its technique of investing in fast commerce enterprise.

The firm’s board at a gathering held on Friday permitted the acquisition of as much as 33,018 fairness shares of Blink Commerce from its shareholders for a complete buy consideration of Rs. 4,447.48 crore at a value of Rs. 13.45 lakh per fairness share, Zomato mentioned in a regulatory submitting.

Blink Commerce runs the net fast commerce service beneath the Blinkit model. It was previously generally known as Grofers. The transaction will likely be carried out by means of issuance and allotment of as much as 62.85 crore absolutely paid-up fairness shares of Zomato having face worth of Re. 1 every at a value of Rs. 70.76 per fairness share on a preferential foundation, it added.

The firm already holds 1 fairness share and three,248 choice shares presently in BCPL, the submitting mentioned.

“This high cash burning sector houses fierce competition from the likes of Zepto, Dunzo, Swiggy Instamart, BigBasket, etc and it will be interesting to see how this expensive investment by Zomato pans out in the future,” mentioned Shivam Bajaj, Founder and CEO at Avener Capital, on Zomato – Blinkit deal.

Even although the corporate reported wholesome positive factors on its listings on the inventory exchanges in July final yr, it couldn’t capitalise on it additional.

“The recently announced acquisition of Blinkit by Zomato is expected to add to its woes of high operating losses. The Blinkit is synergistic to Zomato’s food delivery business and the management expects the business to grow significantly in the future. The quick commerce market, however, has become incredibly competitive, and it will take a very long time to figure out the unit economics and turn profitable,” mentioned Punit Patni, Equity Research Analyst, Swastika Investmart on the decline in Zomato shares.

Further, the present market situations aren’t conducive for companies which can be rising with out exhibiting earnings, mentioned Patni, including that the corporate is appropriate just for traders having a high-risk urge for food and a long-term view. The firm’s present market capitalisation is price Rs. 52,242 crore, National Stock Exchange information confirmed.

Given the extraordinary aggressive depth within the fast commerce area, brokerage home JM Financial believes that the trail to profitability for Zomato group put up the acquisition of Blinkit can get prolonged by no less than a yr to FY26 from FY25.