Zomato Plunges Over 6% on Friday, M-Cap Slips Below Rs 1 Lakh Cr: Details

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Zomato Plunges Over 6% on Friday, M-Cap Slips Below Rs 1 Lakh Cr: Details
Credit: © Reuters.

By Malvika Gurung

Investing.com -- Shares of the online food aggregator Zomato Ltd (NS: ZOMT ) plunged 6.11% to Rs 117.65 apiece at 11:40 am on Friday, continuing its downward spiral for the fourth consecutive session, under selling pressure. 

In these four sessions, the stock has slid over 11%, and its price has tanked 30.4% from the 52-week high of Rs 169.1 set on Nov 16, 2021. 

With its current price, Zomato’s shares have fallen to over a 5-month low, and its market capitalization has eroded under the Rs 1 trillion mark to Rs 92,528 crore while writing this report. As a result, Zomato is no longer listed in the top-50 most valued companies, in terms of market capitalization.

The food delivery stock is trading close to its record low price of Rs 114, attained on its debut day on the stock exchanges on July 23 last year. The stock has tumbled 8% in the past month and 13% in the last 3 months, largely underperforming compared to the broader index.

On Dec 8, 2021, brokerage firm JP Morgan reported that it found Zomato’s network density, economics and exclusivity weaker than its competitor Swiggy in the country’s top three cities.

It reported that along with having a weaker restaurant network and density compared to Swiggy, Zomato’s restaurant exclusivity stood at 45% compared to Swiggy’s at 56%. This is due to Zomato giving out higher discounts, which adversely impacts its contribution margins.

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