Zomato turns volatile as co-founder Gaurav Gupta quits

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After hitting a record intra-day high of Rs 152.75 apiece, shares Zomato slipped into the red after Gaurav Gupta, one of the top executives of the online food delivery platform announced his resignation. Gupta, joined Zomato in 2015 was elevated as Chief Operating Officer in 2018 and as the founder in 2019.

The stock nosedived over 10% from the day’s high to hit an intraday low of Rs 136.20 apiece in the afternoon trade. On the BSE, the counter clocked 66.89 lakh shares so far compared to a two-week daily volume of 21.85 lakh shares.

Zomato founder and CEO Deepinder Goyal took to Twitter to confirm the news.

Thank you @grvgpta – the last 6 years have been amazing and we have come very far. There’s so much of our journey still ahead of us, and I am thankful that we have a great team and leadership to carry us forward.https://t.co/AJAmC5ie6R

— Deepinder Goyal (@deepigoyal) September 14, 2021

Separately, Zomato has decided to stop its grocery delivery service from 17 September on the back of gaps in order fulfilment leading to poor customer experience. The online food delivery firm also pulled the plug on the Nutraceutical business. Zomato had ventured into the nutraceutical business last year with the launch of health and fitness products.

Zomato is one of the leading Food Services technology platforms in India in terms of the value of food sold, as of 31 March 2021. The company is present in 23 countries. The food delivery firm posted a consolidated net loss of Rs 356.2 crore in Q1 FY22, higher than the net loss of Rs 99.8 crore in Q1 FY21. The company’s net sales jumped 217% year on year to Rs 844 crore in Q1 FY22 over Q1 FY21.

Shares of Zomato entered bourses on 23 July 2021. The scrip was listed at a price of Rs 115, a premium of 51.32% to the issue price of Rs 76 per share. The initial public offer (IPO) of online food delivery platform Zomato received bids for 2,751.27 crore shares as against 71.92 crore shares on offer. The issue was subscribed 38.25 times. The issue opened for bidding on 14 July 2021 and closed on 16 July 2021. The price band of the IPO was fixed at Rs 72-76 per share.