Zomato Becomes First Indian Startup to Join BSE Sensex 30 Replacing JSW Steel

Zomato, the popular online food delivery and restaurant discovery platform, has recently achieved a significant milestone by becoming the first Indian startup to join the Bombay Stock Exchange (BSE) Sensex 30. This remarkable feat comes as Zomato replaces JSW Steel Limited in the prestigious benchmark index of India's top 30 companies.

How Zomato achieve this milestone?

Over the past six months, Zomato's shares have surged by an impressive 45%, outperforming the broader market index. In 2024 alone, the stock has recorded a staggering 133% gain, indicating investors' confidence in the company's prospects.

Zomato's financial turnaround has been a key driver of its stock performance and market capitalization. The company achieved profitability in the first quarter of FY24 and has consistently posted net profits in subsequent quarters.

In the July-September period, Zomato recorded a 68% increase in consolidated revenue from operations, with its net profit soaring fivefold year-on-year to Rs 176 crore. This robust growth was fueled by improvements in food delivery margins and near-break-even performance in quick commerce operations.

Brokerage firm Nuvama projects significant fund flows into Zomato as institutional investors adjust their portfolios to align with the updated index composition. The company is expected to attract an estimated $513 million in inflows, reflecting heightened investor interest in tech-driven businesses.

On the contrary, JSW Steel, which will exit the index, is likely to witness outflows totaling $252 million. This reshuffling of funds underscores the shifting dynamics within India's stock market ecosystem.

In a move aimed at solidifying its financial position, Zomato recently raised Rs 8,500 crore through a qualified institutional placement (QIP), predominantly attracting domestic investors.

This infusion of capital will support the company's expansion plans and enable it to capitalize on emerging opportunities in the online food delivery and quick commerce segments.

Zomato's quick commerce subsidiary, Blinkit, is currently engaged in a fiercely competitive market landscape, contending with the likes of Swiggy's Instamart, Zepto, BigBasket, and Flipkart.

Analysts have stated that a significant portion of Zomato's valuation is now attributed to Blinkit, as indicated by the sum-of-the-parts (SOTP) analysis. This points to Blinkit’s impact in driving Zomato's growth and future performance in the e-commerce space.

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