Zomato cancels NBFC application, states no intention to engage in lending activities

Zomato, a prominent player in the food delivery industry, has chosen not to proceed with its intentions to enter the lending sector. The company announced in a BSE filing that its subsidiary, Zomato Financial Services, has chosen to pull back its NBFC license application with RBI.

The company based in Gurgaon stated in a regulatory filing on Tuesday that there is no significant effect on its revenue/operations and it is choosing to disclose this information willingly.

The NBFC license application was sent in on April 29, 2022. It happened when the company was said to be negotiating with several NBFCs to provide working capital loans to its partner restaurants. Zomato established Zomato Financial Services in February 2022.

The revelation occurred when Zomato Payment Private Limited (ZPPL), a distinct subsidiary of the company, willingly returned the authorization certificate received from the Reserve Bank of India (RBI) in May to function as an online payment aggregator.

Zomato revealed in 2021 that it had established ZPPL as a fully owned subsidiary to function as a payment aggregator and issue prepaid payment instruments.

The company and Paytm, a fintech giant, announced last month that they were discussing the possibility of acquiring fintech's movie and event ticketing business.

Even though Zomato and Paytm did not reveal the exact value of the deal, analysts believe it could be around 1,600 crore to 2,000 crore.

This will be Zomato's second biggest acquisition after buying Blinkit for $569 million in an all-stock deal in 2022. The agreement aligned with Zomato's plan to increase investments in its mining business. Last week, the company also revealed plans to inject approximately 100 crore into Zomato Entertainment, covering its live events and ticketing operations.