Zomato, India's leading food delivery and quick-commerce company, has successfully raised $1 billion through a qualified institutional placement (QIP), marking its first major fundraise since its initial public offering (IPO) in 2021. The company issued approximately 336.5 million shares at ₹252.62 each, equivalent to $3 per share, according to a stock exchange filing on Friday.

The QIP, which opened on November 25 and closed on November 28, saw strong participation from leading domestic mutual funds. Motilal Oswal emerged as the largest investor, with its family of funds picking up 20.81% of the issue. ICICI Prudual's funds secured 12.78%, while HDFC and Kotak funds acquired 8.68% and 5.95%, respectively. The strategic timing of the capital raise is noteworthy, coming just weeks after rival Swiggy's $1.35 billion IPO earlier this month.

Zomato's move is seen as a bid to maintain competitive parity in India's rapidly growing quick-commerce market. The company, which already had $1.3 billion in cash reserves, is seeking to bolster its position against well-funded rivals like Swiggy, Zepto, and BigBasket. Zepto, another leading quick-commerce startup, secured $350 million earlier this month in a deal brokered by Motilal Oswal.

Zomato co-founder and CEO Deepinder Goyal had hinted last month that the firm was seeking additional funds to stay competitive. The company has been performing well, reporting its second consecutive quarterly profit. Through its subsidiary Blinkit, Zomato leads India's quick-commerce market, which is projected to generate over $6.5 billion in annual run-rate revenues.

The QIP has had a mixed impact on the stock market. Shares of Swiggy dropped 4.1% on Friday, capping this week's overall rally to 12.8%. Shares of Zomato, offered to investors participating in QIP at a 5% discount, fell roughly 1% on Friday but remain up 127.7% year-to-date.

The successful QIP is a significant milestone for Zomato, providing the company with the necessary resources to expand its operations, enhance its services, and explore new opportunities in the quick-commerce space. As the Indian food delivery and quick-commerce market continues to evolve, Zomato's latest fundraise is expected to have a lasting impact on the industry's competitive landscape.

With its strengthened position, Zomato is poised to continue its growth trajectory, leveraging its extensive network, technology, and expertise to deliver innovative solutions to customers. As the company looks to the future, its ability to adapt to changing market trends and consumer preferences will be crucial in maintaining its leadership position in India's quick-commerce market.