Deepinder Goyal-led Zomato withdraws its NBFC licence application with RBI

Deepinder Goyal-led food delivery giant Zomato has abandoned plans to enter the non-banking financial company (NBFC) sector.

The company's subsidiary, Zomato Financial Services Limited (ZFSL), has decided to voluntarily withdraw its application to operate as a non-banking financial company (NBFC).

The decision was taken during a board meeting of ZFSL.

"ZFSL, a wholly owned subsidiary of Zomato Limited, at its meeting held today i.e. July 2, 2024, has decided to voluntarily withdraw the application dated April 29, 2022, submitted with the Reserve Bank of India (RBI) for getting a certificate of registration for undertaking the business of a Non-Banking Financial Company (Type II NBFC-ND) as we do not wish to pursue the lending/credit business anymore," Zomato informed in an exchange filing.

Is there any impact on Zomato?

According to Zomato, the withdrawal of the NBFC application will not significantly impact the company's revenue or operations.

The company emphasized that the disclosure was made voluntarily. The development follows the recent surrender of the payment aggregator license by another Zomato subsidiary, Zomato Payment Private Limited (ZPPL), earlier this year.

ZPPL, established in 2021, was intended to function as a payment aggregator and issuer of prepaid payment instruments. Despite these withdrawals, Zomato's core operations and financial health appear unaffected.

Is Zomato profitable?

Zomato reported a profit of Rs 175 crore for the fourth quarter ending March 31, 2024, marking the fourth consecutive quarter of profitability.

This is a significant turnaround from the Rs 188 crore loss reported in the fourth quarter of the previous fiscal year.

Sequentially, Zomato's net profit increased by 26.8%, rising from Rs 138 crore in the third quarter of FY24.

For the entire fiscal year 2023-24, Zomato recorded a profit of Rs 351 crore, a notable improvement from the Rs 971 crore loss incurred in the previous year.