Zomato Stock plunges by 3% after CCI’s Probe Order

The share price of the leading food delivery platform, Zomato plunged by 3% just a day after the Competition Commission of India (CCI) launched an investigation against the company and its rival, Swiggy. CCI launched a probe over allegations of unfair pricing strategies. Today Morning the share price of Zomato was hovering around Rs. 84 which is almost 3% less than its previous day's close at ₹86.2. The market capitalization of Zomato currently stands at ₹66,084 crores ($8.7 billion). It is significantly less than the market cap of ₹100,000 crores, or $13 billion, which the company reached within a few hours of its debut on the stock market. Since its debut on the Indian bourses in the month of July, last year, Zomato’s shares have fallen by over 33%. The CCI launched a probe against Zomato and Swiggy after 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 CCI in its statement said: “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.”