Daybreak - Why Info Edge can’t love Zomato eternally

Episode Date: June 17, 2025

In a recent, 10-page note recapping its investing journey, Info Edge (India) founder Sanjeev Bikhchandani proudly, and justifiably, called Zomato and Policybazaar “breakout successes”, ��winners”, and “outliers”.A few days earlier, Zomato, now renamed Eternal, had released its sobering financials for the three months ended March. So what’s Infoedge doing about it? Apart from its own businesses – spanning recruitment, real estate, matrimony and education – it owns roughly 12.5% each of Eternal and PB Fintech, the parent of insurance marketplace Policybazaar, and has not sold a single share in either since they started trading.The reason is simple and it was stated in its shareholders letter. It wants to be strategic and not opportunistic about existing businesses because it sees itself as a long term investor and not some trader. The thing is, not everyone is on the same page. Tune in. Want to attend The Ken's next event on health, fitness and wellness? Buy tickets here. Here's your chance to help us shape the conversation: https://theken.typeform.com/to/bZhqWl2g

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too? It's for a special announcement. For the last few months, I and Sita Ramon, Ganesh, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production. Sita and I are still reeling from the intensity of our first studio recording.

Intermission launches on March 23rd. To get an alert as soon as we release our first episode, please follow Intermission on Spotify and Apple Podcasts or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. A little while ago, the classified company and tech investor Info Edge released a 10-page note recapping its investing journey.

Now, the company's founder, Sanjeev Bih Chundani, quite proudly proclaimed how it's two, biggest bets Zomato and Policy Bazaar were, in his words, breakout successes, winners, outliers. Now, Bikchindani's pride is justified to a degree. After all, Infoage was an early backer for both these companies that later went on to dominate the realm of food delivery and insurance. But here's the thing.

You need to take one glance at Zomato's most recent financials for the three months ended March to understand that circumstances have most certainly changed. The grocery and food delivery companies' profits plunged almost 80% from the same period last year. And that's largely thanks to the absolute battleground this space has become. Many have thrown their hat in the ring, but very, very few have survived. Those who have? Well, they have the scars to show for it.

Just take eternal own blanket, for instance. It's managed to rise right to the top of the grocery delivery space, all while making sure no one in the business will be making any money any time. soon, itself included. Even food delivery, which is a profitable venture for Eternal, hasn't really been growing fast enough. Expectedly after a dream run, the stock is down 12% this year, while the Nifty 50 Index is up 6%. Even those eternal investors who were euphoric about the company's future a year ago are now somewhat circumspect. So what is InfoEge doing about it? Well, apart from its own businesses spanning recruitment, real estate, matrimony and education,

it owns roughly 12.5% each of Eternal and TD FinTech, which is the parent of insurance marketplace policy bazaar. It's not sold a single share in either since they started trading. Now, that's quite unusual. But InfoH says it has a very simple reason for that. It wants to be strategic and not opportunistic about existing businesses because it sees itself as a long-term investor and not some trader. But the thing is, not everyone is on the same page here. Hello and welcome to Daybreak, a business podcast from the Ken. I'm your host Rahil Philippos and I don't chase the new cycle. Instead, every day of the week, my colleagues

Tickda Sharma and I will come to you with one business story that is worth understanding and worth your time. Today is Wednesday, the 18th of June. Some people in the business, and by that I mean analysts, investors, well, they've said that Info Edge has too much going on. When my colleague Sita Ramanji spoke to Piyush Pandey, who's an analyst at Central India, which is a brokerage, he said Infoedge has been working a lot like a mutual fund by investing in so many different companies. Instead, Piusch said it should be focusing on its core business, Norkree, a job listings platform which makes up three quarters of InfoAge's revenue, which in the nine months to December

was close to 2,000 crore rupees. For Infoage, Eternal and PeeB FinTech were finally. financial investments. But it has been a backer of these companies longer than any financial investor would typically be comfortable with. Just for context, Info Edge first put money in PB FinTech in 2008 and then in Zomato two years later. Both these bets contribute nearly a third of Infoeges market cap, which is about 100,000 crore rupees. That's why it isn't backing off so easily. You see, yes, it has a 90% market share in online recruitment thanks to Nocri. But info had just about kept pace with the Nifty Next 50 index in the past five years.

And it's trailing it this year. Then there were some circumstantial concerns, like right after the COVID time surge in digitization, when the IT industry's hiring slowed down. Now, that is half of Nockrey's business. But the company still managed to regain some momentum after a rough 2023. This year, most IT majors are planning to hire as many as they did in the last fiscal. So there isn't cause for concern.

yet. Norley's shareholders are worried about another looming dark cloud on the horizon. Artificial intelligence. Now, that's going to be the disruptor to end all disruptors when it comes to jobs. And that's something Infoed Chief Executive Hitesh Oberoi even acknowledged recently during an earnings call. Small wonder then that InfoH has been trying to expand Nockri's geographical fitprint to 100 cities and two years from the current 67, just in order to persuade more non-IT companies to use its services.

But InfoH knows it's not going to be a smooth ride throughout. The thing is, it realizes that its platform just isn't as efficient for non-I-T hiring as it is for IT jobs. Recruiting for an IT company is easier for two main reasons. The first is centralized hiring. And the second is the fact that IT firms are typically concentrated in cities like Banglau, Hyderabad or Delhi-N-Card. So geographical matching of candidates is much easier than for a bank that's looking to hire across branches throughout the country. The current boom in manufacturing seems ripe for the picking for Infoedge. If only employers in the sector were big on job portals, stay tuned.

So what does all of this mean for Infoage? Well, its financials don't signal trouble on the horizon. On the contrary, Infoage is a bit of an outlier in that sense. Like one analyst pointed out to us, typically in India's equity market, the narrative is often rosy. But then the numbers end up disappointing. Meanwhile, in InfoEdge's case, it is the other way around. But public market valuations often hinge on how investors think a company could fare after two to three years. And the thing is, they don't think highly of the non-recruitment businesses, which are still lossmaking.

Brokers like Motilal Oswald and Giojeet attribute a mere 3% of Infoedges market cap to the education and matchmaking businesses. The one other business that could potentially break out, real estate classifieds, platform 99 acres, but it requires a huge amount of marketing spend. So, Infoage's many investments are crucial. But just how far can they go? Well, yes, Zomato and Paltzee Bazaar have created a lot of value for the company, but the expectation is that they continue to dominate, grow and create value in their respective industries.

It's a fair expectation. After all, Infoage has invested over 720 crore rupees in both companies and its combined shareholding is now worth over. 39,200 crore rupees. But whether that's possible, well, that's a whole other matter. Eternal is now fending off more rivals than ever, both in

quick commerce and in food delivery. In fact, a report from the Bank of America and March put it quite simply. It stated that the quick commerce narrative has very quickly moved from higher growth, improving unit economics, to rising losses, high competition market. Now, the thing

is, this shift is taking place at a time when risk appetite is reducing. significantly. Meanwhile, over at PB FinTech, investors haven't been particularly enthralled for most of its lifetime. The stock flatlined for almost two years. And then investors tire of the wait for profits stayed away. But then the company's bottom line started taking on a different hue and they came right back. It's been profitable for five straight quarters and the stock has risen by a third in the past year, even after accounting for the fall since January. But for all that momentum of late, P.B. Fintech's rise since its listing in November 2021 is roughly the same as that of

the index. Even so, investors are warming up to possibilities that arise from P.P. Fintech's dominant insurance marketplace. So clearly, there is a stronger case for InfoHairing its stake in Eternal than in PBFintech. The worry is that investors could catch on soon enough. Even so, InfoHage will have to put its own shareholders' interests first. Daybreak is produced from the newsroom of the Ken India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings.

A full subscription unlocks daily long-form feature stories, newsletters and podcast extras. Head to the Ken.com and click on the red subscribe button on the top of the website. Today's episode was hosted by Rahil Filippo's and edited by Rajiv Sien.