Food and grocery delivery giant Zomato has initiated the liquidation process for its wholly-owned subsidiary in Portugal, Zomato Media Portugal, Unipessoal Lda (ZM Portugal). This move is part of a broader strategy to streamline its international operations, which began in 2021.
Key Takeaways
- Zomato is liquidating its Portuguese subsidiary, ZM Portugal.
- The company has previously exited markets in Australia, New Zealand, Jordan, Ireland, and Indonesia.
- ZM Portugal had no active business operations and a net worth of Rs 1.2 crore.
- The liquidation will not impact Zomato’s overall revenue.
- Zomato’s stock recently hit a 52-week high.
Background
In July 2021, Zomato embarked on a "cleaning up" exercise to shut down international businesses that did not contribute to its revenues. This initiative followed the company’s listing on the stock exchanges. The liquidation of ZM Portugal is the latest in a series of similar actions, including the closure of subsidiaries in Australia, New Zealand, Jordan, Ireland, and Indonesia.
Financial Impact
According to a stock exchange filing, ZM Portugal does not have any active business operations and is not considered a material subsidiary. Therefore, its dissolution will not affect Zomato’s turnover or revenue. The net worth of ZM Portugal was reported to be Rs 1.2 crore.
Previous Exits
Zomato has been systematically exiting international markets. In November of the previous year, the company discontinued its food delivery service in the UAE. Zomato had sold its UAE business to Kuwait-based food-delivery startup Talabat in 2019 for $172 million but continued to provide services through its app until the recent exit.
Market Performance
Despite these exits, Zomato’s stock has shown resilience. On July 13, the stock price reached a new 52-week high. A research note from ICICI Securities dated July 10 indicated that Zomato is expected to have outpaced most quick-service restaurants (QSRs) in the quarter ending June 30. The brokerage firm projected a 9.2% year-on-year growth in Zomato’s food-delivery gross order value (GOV) and a 6.8% sequential growth.
On Monday, Zomato’s stock closed at Rs 81.27 on the BSE, marking a 1.2% increase from its previous close.