On Tuesday, the online food delivery platform Zomato extended its decline as it shed 7.5 per cent and hit a low of Rs 61 per share on the Bombay Stock Exchange (BSE).

The shares hit a low of 14 per cent in the last two days after they announced the acquisition of quick commerce firm Blinkit.

The company had announced the acquisition of loss-incurring firm Blinkit for Rs 4,447 crore. The payment will be settled through the issue of around 629 million Zomato shares (about 6.88 per cent equity dilution on a fully diluted basis) at the prescribed preferential allotment price of Rs 70.76 and cash acquisition of Hands-on Trades Pvt Ltd for Rs 60.7 crore.

“While the company has taken a haircut to the earlier paid valuation, we believe Blinkit needs a further investment of $250 million, which could be invested over FY23-24. This will take Zomato’s total investment in Blinkit to $1.05 billion,” according to Kotak Institutional Equities.