Zomato to provide Rs 1,145 crore loan to Grofers India, acquires 16.66% stake in Mukunda Foods
Food delivery men of Zomato take COVID-19 test at Krishnankovil Primary Health Centre in Nagercoil, Wednesday, May 12, 2021.
Online food delivery platform Zomato on Tuesday said its board has approved granting a loan of up to USD 150 million (around Rs 1,145 crore) to digital grocery shopping player, Grofers India Pvt Ltd (GIPL).
The board has also approved acquisition of 16.66 per cent take in food robotics and automation firm, Mukunda Foods Pvt Ltd, for an aggregate cash consideration of rupee equivalent of USD 5 million, Zomato said in a regulatory filing.
The company, which had last year invested USD 100 million (Rs 745 crore) for acquiring around 9 per cent stake in Grofers, said its board has delegated the authority to its senior management to decide the key terms of the loan and execute the definitive documents at a future date.
"The interest rate for the loan will be 12 per cent per annum or higher with a tenor of not more than 1 year. This loan will support the capital requirements of GIPL in the near term and is in line with our stated intent of investing up to USD 400 million cash in quick commerce in India over the next 2 years," the filing said.
Zomato further said it will acquire 16.66 per cent of share capital of Mukunda Foods on a fully diluted basis through subscription of 13,289 Series B1 compulsorily convertible preference shares and ten equity shares for an aggregate cash consideration of rupee equivalent of USD 5 million.
"Our investment will help Mukunda Foods scale faster, help reduce restaurant food prices, expand margins, and enhance customer delight," it added.
The proposed investment is subject to fulfilment of certain customary conditions precedent and other terms and conditions agreed under the investment agreement executed between the parties, Zomato said.
Mukunda is a food robotics company that designs and manufactures small robotic equipment to automate food preparation for restaurants, enabling them to scale up rapidly while maintaining consistency in food quality and customer experience across multiple outlets, it added. The company also helps restaurants to become more efficient by reducing manpower cost, wastage and increasing kitchen throughput.
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