Zomato shares are making headlines today, October 18, 2024, as the online food delivery giant prepares for a significant board meeting on October 22. This meeting will focus on raising funds through a Qualified Institutional Placement (QIP) and reviewing the company’s financial results for the quarter ending September 2024.
Main Points
As of now, Zomato’s stock is trading at ₹260, reflecting a decline of approximately 3.90% from the previous close of ₹270.65. This drop comes after a series of fluctuations throughout the trading day, where the stock reached a high of ₹270.30 before falling to its current level. The market capitalization of Zomato has also seen a decrease, now standing at around ₹2.39 lakh crore.
- Current Price: ₹260
- Day Low: ₹255.25
- Day High: ₹270.30
- Previous Close: ₹270.65
- Market Capitalization: ₹2.39 lakh crore
The stock has experienced significant growth this year, with an increase of 118% year-to-date and 137.62% over the past year. However, today’s bearish trend raises concerns among investors.
Analysts are closely watching Zomato’s performance as it heads towards its upcoming board meeting. The expected target price for Zomato shares is currently set between ₹265 and ₹280, depending on market reactions to the fund-raising news and quarterly results. The stock’s Relative Strength Index (RSI) stands at 47.7, indicating that it is neither overbought nor oversold at this moment.
Reasons for Today’s Bearish Trend
Several factors contribute to today’s bearish sentiment surrounding Zomato shares:
- Upcoming Fundraising Announcement: The primary reason for the decline is the anticipation surrounding the board meeting scheduled for October 22. Investors often react cautiously to fundraising announcements due to potential dilution of shares.
- Market Sentiment: Overall market conditions can also influence individual stocks. The broader market sentiment appears mixed today, which may be impacting Zomato’s performance.
- Profit-Taking by Investors: Following a strong rally in Zomato’s stock price over the past year, some investors may be taking profits, leading to increased selling pressure.
- Comparison with Competitors: With competitors like Swiggy gearing up for their initial public offerings (IPOs), investors might be reassessing their positions in Zomato amid growing competition in the food delivery space.
Zomato’s board will consider a proposal to raise funds amounting to approximately ₹8,500 crore through QIP. This move aims to increase domestic shareholding beyond 50% as foreign institutional investors currently hold about 50.48% of the company. This fundraising initiative will be crucial for Zomato as it seeks to strengthen its market position amid rising competition.
Financial Results Review
Alongside the fundraising discussion, Zomato will also review its unaudited financial results for the quarter ending September 2024 during this board meeting. Analysts expect these results to provide insights into the company’s performance and future growth prospects.
The market will be keenly observing how investors react post-announcement on October 22. If Zomato can successfully communicate its growth strategy and reassure investors about its financial health, it could potentially stabilize or even boost its share price in subsequent trading sessions.
