Mumbai, India (CU)_ Uber has officially left the online food delivery sector in India following its sale of shares in Zomato. In 2020, Uber Technologies bought a 9.99 percent share in India’s leading meal delivery service, when it sold its Uber Eats business to Zomato. This week, Uber sold its shares in Zomato in a block deal, causing Zomato’s share price to decrease by 0.2 percent.
In recent years, the online meal delivery sector in India has become immensely attractive to investors. However, the shine has gone as the reality of the loss-making operations has been disclosed. Quarterly losses have been recorded by Zomato since the business went public a year ago. However, in spite of the losses faced, the firm has maintained constant growth in orders as customers embrace the meal delivery sector, which is projected to triple over the next three years, with Zomato predicted to maintain a 50 percent market share.
The ride-hailing company of Uber will continue to provide its services in the competitive Indian market, where it will race for market share with its local rival Ola. After selling Uber Eats in India to Zomato in return for a 9.99 percent ownership in 2020, Uber made the decision to withdraw from the market. Nearly one year ago, Zomato raised $1.3 billion through an IPO, paving the way for a multitude of Indian entrepreneurs to obtain capital through IPOs in the South Asian nation. However, as skepticism persists over the valuations of loss-making technology companies, their stock prices have declined.
Following the release of its quarterly performance report, a series of block transactions pushed Zomato’s stock price up by 20 percent on Tuesday, the highest since the company’s debut the previous year. The outcome demonstrated a smaller-than-anticipated loss and revenue in accordance with analyst forecasts. Wednesday’s Indian exchange data revealed that Fidelity’s developing markets fund purchased 54.4 million shares, while ICICI Prudential Life Insurance Company Ltd. acquired 45 million.