Zomato is an Indian food delivery company. Credit: Ravi Sharma on Unsplash.

Ant Group, previously known as Ant Financial, has divested a 2.1% stake in the Indian food delivery company Zomato for $341.5m.

The move comes amidst ongoing tensions between India and China, which have affected trade and investment flows between the two nations.

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Shares totalling 176.4 million have been sold for between Rs160.11($1.93) and Rs160.40 each.

Investment bank and financial services company Morgan Stanley was reported to have acquired 56.8 million shares, while the identities of other buyers remain undisclosed.

In December 2023, Ant Group’s holding in Zomato was 6.42%. This follows the November 2023 exit of China’s Alipay, which sold its entire 3.44% stake in Zomato.

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Zomato reported a significant turnaround with a second quarter (Q2) profit of Rs360m in fiscal 2024 (FY24), compared to a net loss of Rs2.51bn in the same quarter of the previous year.

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The company’s revenue from operations soared by 71.4% to Rs28.48bn from Rs16.61bn in Q2 FY23.

Zomato’s consolidated adjusted revenue for Q2 FY24 also grew 53% year-on-year to Rs32.27bn.

Adjusted earnings before interest, taxation, depreciation and amortisation for the quarter were Rs410m, a positive shift from a negative Rs192m in Q2 FY23.

India Today has reported that the increase was mainly driven by the rise in online food ordering demand, particularly in smaller towns.

Zomato’s strategic expansion efforts for its dining-out business to provide online table reservations also supported the company’s growth.

In January 2020, Zomato raised $150m in funding from existing investor Ant Financial, a subsidiary of China-based Alibaba. The investment is part of a broader $600m funding round.