Zomato stock dips nearly 3% after CCI’s probe order

• Zomato's shares were trading at ₹83.70 on Tuesday morning.
• It currently sits on a market cap of ₹66,084 crore ($8.7 billion).
• Zomato’s shares have fallen over 33% since its listing in July 2021.

The share price of Zomato dipped nearly 3% on Tuesday morning, a day after the Competition Commission of India (CCI) decided to probe the company and its rival Swiggy over unfair pricing strategies.

At 9:48 a.m., Zomato's shares were trading at ₹83.7, which is 2.9% lower than the previous day's close at ₹86.2.

The food delivery firm currently sits on a market cap of ₹66,084 crore ($8.7 billion). This is nearly half of the ₹100,000 crore, or $13 billion, market cap the company reached within a few hours of its debut in the stock market.

Zomato’s shares have fallen over 33% since its listing in July 2021.

India’s anti-monopoly watchdog on Monday ordered a probe into food delivery businesses Zomato and Siggy over alleged unfair pricing practices and several other issues flagged by the restaurant association last year.

The National Restaurants Association of India (NRAI) accused Zomato and Swiggy of indulging in deep discounting, data masking, imposing price parity terms on restaurants that worked with them and imposing high commission. The association, which represents over 500,000 restaurants, alleged that these practices were actually eating into these businesses.

Now the CCI has asked its director-general to submit a report on this matter in the next 60 days.

“The Commission is of the view that there exists a prima facie case with respect to some of the conduct of Zomato and Swiggy, which requires an investigation by the director general (DG), to determine whether … (they have) resulted in contravention of the provisions of Section 3(1) of the Act read with Section 3(4) thereof,” the anti-monopoly watchdog said in its order dated April 4.

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