Eternal Block Deal: Undisclosed Investor to Offload Stake Worth Rs 1,500 Crore
In a significant development, Eternal Ltd., the parent company of the popular quick commerce food delivery brand Zomato, is set to see a 0.5% stake offloaded by an undisclosed institutional investor in a block deal worth up to Rs 1,500 crore, according to sources.
The shares will be offloaded for an offer price of Rs 289.5 per share, which is at a 1% discount from the current market price. This move is expected to have a significant impact on the company’s stock price and investor sentiment.
Increasing Competition in the Quick Commerce Space
The block deal comes amid increasing competition in the quick commerce space, with other major players such as Amazon Now and Zepto making significant moves. Zepto is set to raise $300 million from domestic investors, while Swiggy is vying to raise $1.1 billion or Rs 10,000 crore via a qualified institutional placement.
Amazon’s Amazon Now service, which offers fast delivery for groceries and other essential products, is also set to expand into Tier-1 metro cities such as Bengaluru, Mumbai, and Delhi, which could pose a significant challenge to Eternal’s quick commerce brand Blinkit. Zomato share price is likely to be affected by these developments.
Brokerage Views and Target Prices
Brokerage firm Macquarie has maintained ‘underperform’ ratings on both Eternal and Swiggy, with a target price of Rs 200 on Eternal, implying a 33% downside, and Rs 285 on Swiggy, noting a potential 28.6% downside. The brokerage has also noted that Amazon Now’s pricing model is designed to attract high-frequency users, with no handling fees, free delivery on orders above Rs 99, and cashback offers on orders above certain thresholds.
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Impact on Investor Sentiment
The block deal and increasing competition in the quick commerce space are likely to have a significant impact on investor sentiment, with many investors closely watching the developments in the sector. The Indian stock market trends are expected to be influenced by these factors, and investors are advised to stay informed and up-to-date with the latest news and analysis.
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