Zomato and Blinkit Deal
Zomato–Blinkit deal, including its structure, strategic rationale, financial implications, and outlook:
🧾 Deal Summary
In August 2022, Zomato (now rebranded as Eternal Limited) acquired Blinkit (formerly Grofers) in an all-stock transaction valued at ₹4,447 crore (~US $568 million)
Zomato issued around 629 million shares, representing about 6.9% dilution on a fully diluted basis, at ₹70.76 per share
The acquisition was fully approved by Blinkit’s shareholders and regulated under Indian law (NCLT and RBI guidelines)
After the acquisition, Blinkit became a wholly owned subsidiary of Zomato/Eternal
🚀 Strategic Rationale
Expansion into Quick Commerce
Blinkit offers rapid grocery/FMCG delivery (10–20 minutes) via dark stores network, complementing Zomato’s existing food delivery business in India
Deepinder Goyal, Zomato’s CEO, highlighted quick commerce as a strategic growth driver, working in synergy with food delivery to increase order frequency and addressable market
Brand Integration & Corporate Restructuring
In February 2025, Zomato announced a corporate rebranding: the parent company was renamed Eternal Limited, encompassing four units—Zomato (food), Blinkit (quick commerce), District (events), Hyperpure (kitchen supplies)
This reflects Blinkit’s transition from a subsidiary to a core part of the company’s long-term vision
📊 Financial Performance & Investment
Zomato has injected further capital into Blinkit — ₹300 crore in mid‑2024 and an additional ₹500 crore in January 2025, bringing total post‑acquisition investment to around ₹2,800 crore
Blinkit’s operations scaled rapidly: in Q2 FY25, it generated ₹1,156 crore revenue (129% YoY growth), while EBITDA loss shrank to just ₹8 crore—substantially improving margins
Blinkit is now valued at approximately $13 billion, surpassing Zomato’s core food delivery segment—a valuation driven by growth expectations
⚠️ Challenges & Analyst Views
Analysts warn of extended profitability timelines: JM Financial forecasts profitability only by FY27, noting Blinkit’s high burn rate and scaling costs
Kotak and Edelweiss flagged concerns around unit economics, rising competition, and delayed returns on capital deployed in blinkit
Evaluations from firms like Jefferies, Morgan Stanley, and Dolat Capital show diverging views—some optimistic on synergies and fleet utilization, others cautious on digital marketing, overlapping apps, and delayed margins
🔭 Looking Ahead: Blinkit’s Growth Timeline
| Parameter | Target / Status |
|---|---|
| Dark stores (2026 goal) | 2,000 micro‑warehouses (vs ~1,200 in early 2025) |
| Cash break‑even timeline | Selected dark stores possibly within 1 year; EBITDA-level scale in ~3 years |
| Full segment profitability | Expected by FY27 |
During the expansion, Zomato/Eternal will need to manage competitive pressure from Swiggy’s Instamart, Zepto, BigBasket, Flipkart Minutes, and Amazon’s quick commerce offerings
✅ Bottom Line
The Zomato–Blinkit deal was a landmark transaction in Indian quick-commerce—transforming Zomato into a multi-business conglomerate (Eternal Ltd.), roasting high-growth Blinkit as a core driver. Though scaling has improved revenue and trimmed losses, profitability remains distant. Investors and analysts remain split—some see long-term value based on synergy and execution, while others caution on capital intensity and competitive headwinds.
Would you also like insights on:
Stock performance of Eternal Ltd. (formerly Zomato)?
How this merger compares to Swiggy–Instamart or Amazon—
or implications for end users (like app integration or loyalty programs)?
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