Zomato Shares Surge Over 4% Amid Bullish Momentum

Stock Extends Gains for Second Consecutive Day Despite Legal Uncertainty

Shares of Zomato Ltd. continued their upward momentum on Wednesday, rallying for the second consecutive trading session despite ongoing concerns over a revived insolvency plea. At 12:50 PM IST, the stock was trading at ₹227.35, marking a 4.12% increase on the Bombay Stock Exchange (BSE).

The rally in Zomato’s stock price comes on the back of strong trading volumes, which have surged in recent sessions. Over the past five trading days, the food delivery giant has gained nearly 9%, indicating growing investor confidence ahead of a period of high seasonal demand.

Key Market Highlights:

• Zomato stock surges 4.12% to ₹227.35 on BSE at midday
• Second consecutive session of gains, up 9% over five days
• Trading volumes continue to rise, signaling strong investor interest
• Stock may benefit from increased demand during IPL 2025, starting March 22
• Legal uncertainty persists as old insolvency case resurfaces

Why Are Zomato Shares Rising?

1. Anticipation of Strong Demand During IPL 2025

Market analysts believe that Zomato is well-positioned to benefit from the upcoming Indian Premier League (IPL) 2025, which begins on March 22. Historically, major sporting events like the IPL lead to higher consumer spending on food and grocery deliveries, boosting revenue for food delivery platforms.

Additionally, Blinkit—Zomato’s quick commerce subsidiary—holds a dominant position in the instant delivery segment, giving the company a competitive advantage over rivals. The increased demand for instant grocery and snack deliveries during IPL matches could drive higher order volumes and profitability.

2. Strong Technical Indicators and Investor Confidence

Zomato’s stock rally is also supported by positive technical indicators. Analysts tracking the stock suggest that:

• The 9% gain over five days indicates strong buying interest
• Trading volumes have been consistently rising, reinforcing bullish sentiment
• The stock’s year-over-year performance remains strong, up 44% in the past 12 months

Despite recent volatility, investors appear to be betting on Zomato’s long-term growth potential, particularly in the quick commerce and food delivery sectors.

3. Legal Uncertainty: Old Insolvency Case Resurfaces

Even as the stock rallies, legal concerns loom over Zomato. Reports indicate that Nona Lifestyle Private Limited has moved the National Company Law Tribunal (NCLT) to restore an old insolvency plea against Zomato.

Background of the Case:

• Nona Lifestyle had initially filed an insolvency petition against Zomato in 2024, alleging:
  • Payment defaults
  • Delays in financial transactions
  • Failure to accept full delivery of goods
• The company is demanding ₹1.64 crore (including interest) from Zomato
• Zomato’s legal team has denied the allegations, arguing that a “pre-existing dispute” exists

Current Legal Status:

• The NCLT had earlier dismissed the case due to non-prosecution
• Nona Lifestyle is now seeking to restore the case under Rule 11 of the NCLT Rules, 2016
• The company has urged the Delhi NCLT bench to initiate the Corporate Insolvency Resolution Process (CIRP) against Zomato
• The case was last heard on March 18, but proceedings have been adjourned to April

While the legal battle could create short-term volatility, investors seem largely unfazed for now, focusing instead on Zomato’s growth potential in food delivery and quick commerce.

How Has Zomato Performed in Recent Months?

Despite the recent surge, Zomato’s stock has witnessed a mixed performance over different time frames:

• Up 9% in the last five trading sessions
• Down 3% in the past month
• Down 19% over the past six months
• Down 18% year-to-date in 2024
• Up 44% over the past year

The stock’s long-term uptrend remains intact, but near-term fluctuations will likely be influenced by:

1. The outcome of the NCLT insolvency case
2. Earnings performance and revenue growth in upcoming quarters
3. Market conditions and investor sentiment towards tech and startup stocks
4. Expansion of Blinkit and its role in Zomato’s overall profitability

Zomato’s Stock?

As Zomato continues to gain traction in the market, analysts will be watching for key triggers that could impact its stock price in the coming weeks.

Factors That Could Drive Zomato’s Growth:

• IPL 2025 Demand Surge: The two-month tournament is expected to drive higher food and grocery orders, benefiting Zomato’s top-line growth.
• Blinkit Expansion: Zomato’s dominance in the quick commerce space could enhance profitability as consumers continue to shift toward instant deliveries.
• Earnings and Profitability: Investors will monitor upcoming quarterly results to assess Zomato’s revenue growth, cost control, and profitability trends.