In a letter, Noida-based Info Edge expressed its intent to sell its Zomato share worth $100 million. Info Edge currently owns around 18.5% of the company. The IPO will be a combination of a fresh issue of equity shares by Zomato Limited and an “offer For sale” by Info Edge.
Zomato is hoping to raise $1.1 billion, with $1 billion coming from equity shares. The company could also consider a pre-IPO placement of equity shares worth $200 million, according to the Draft Red Herring Prospectus filed with the SEBI.
If Info Edge manages to meet its target, the raised capital could help address its liquidity crunch. The pandemic headwinds prompted the company to make a qualified institutional placement (QIP) offering last August to raise $250 million. The ensuing period was marked by a downturn in recruitment activity and property sales, affecting its jobs vertical Naukri and real estate business 99Acres.
However, Info Edge managed to turn its fortunes around in Q3, registering $41.8 million in revenues — a 7.5% increase in revenue from Q2. Info Edge also received a timely boost to the tune of $51 million from Singapore-based investment company Temasek Holdings. The proceeds went to strengthening its market presence, particularly in real estate. It recently acquired 4B Networks, a real estate broker platform.
Info Edge has not revealed where the proceeds from Zomato IPO will go. But if Info Edge’s recent strategies are anything to go by, 99Acres could be the likely beneficiary. The parent company has been channeling profits from Naukri to 99Acres since the start of a prolonged downturn in India’s real estate ecosystem. The pandemic has only aggravated the long-standing crisis.
Info Edge owns and operates numerous digital businesses in India and abroad. The company has over 4,500 employees working out of 80 offices in 47 cities across India and the Middle East.