Zomato rejects EY’s new valuation report that lowered its share price

It has rejected a new valuation report by the downsizing consultancy EY for its takeover of fast-trading start-up Blinkit, according to the food delivery platform’s regulatory filing to BSE.

Zomato bought Blinkit (formerly Grofers) for Rs 4,447 crore in an all-share deal, which was approved by 97% of shareholders who voted on June 26.

Zomato shares were valued at Rs 70.76 in EY’s first report on June 24.

EY’s latest report values ​​Zomato’s share price below Rs 70.76. But the company did not disclose the value of the new share.

Last month, BSE and the national exchange asked Zomato to submit another report using a different valuation methodology, the regulatory filing showed.

“Based on discussions with the exchanges, and complying with the exchanges’ request, we would like to state that the new report was presented to the Board of Directors on August 4, 2022, and after evaluating the share price from the original report and the new report, the Board of Directors concluded that the fair market value of each of the shares The company will remain unchanged at Rs 70.76 per share, which is the issue price disclosed to the shareholders in the notice.”

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Zomato addressed investor concerns regarding its valuation of Blinkit in its latest quarterly report.

“We objectively evaluated all acquisition opportunities available in the fast-trading space and, after focusing on Blinkit, made sure that careful and detailed deliberations and negotiations were conducted before agreeing to the terms of the transaction (as any other company would do for a large and important deal), writes Deepinder Goyal, CEO of Zomato, In a shareholder letter submitted to BSE earlier this week.

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