Zomato, one of India's leading food delivery and quick-commerce companies, has raised $1 billion through institutional investors in its first major funding round since its 2021 IPO. TechCrunch reports that the company issued approximately 336.5 million shares at approx. $3 each in a qualified institutional placement, as disclosed in a stock exchange filing on Friday.

The move caused ripples in the Indian stock market. Shares of Zomato, offered at a 5% discount during the placement, dipped by 1% on Friday but maintained an impressive 127.7% year-to-date rise. Rival Swiggy, which recently went public with a $1.35 billion IPO, saw its shares fall by 4.1%, despite a 12.8% rally earlier in the week.

The $1 billion infusion alters Zomato's corporate structure, reducing its foreign ownership to below 50%, effectively classifying it as a domestic entity. This shift is pivotal for Zomato's quick-commerce unit, Blinkit, as it enables the company to adopt an inventory-led model—currently limited to domestic firms—giving it direct control over products and warehousing.

Analysts at Bank of America noted that the quick-commerce sector, with an estimated total addressable market of 30 million households, is entering a phase of heightened competition. They highlighted Zomato's 40% market share as a critical advantage in maintaining its leadership.

Zomato, which recently posted its second consecutive quarterly profit, continues to solidify its position in an industry projected to generate over $6.5 billion in annual run-rate revenues. CEO Deepinder Goyal affirmed the necessity of the additional funding to maintain competitive parity, particularly as other players raise capital. Zepto, another competitor, secured $350 million earlier this month.