Zomato to Rebrand as Eternal Ltd, Signal Shift Towards Diversification and Long-Term Growth
Bengaluru: Zomato Ltd, a leading food-delivery company in India, has announced its decision to rebrand as Eternal Ltd, marking a significant shift towards diversification and long-term growth. The move is expected to give the company greater freedom to explore new ambitions without putting all its eggs in one basket.
In a letter to shareholders, Zomato chief executive officer Deepinder Goyal said the decision was made after careful consideration of the company's broader vision to build an "enduring institution" that lasts beyond its current leadership. The name change is seen as a strategic step towards achieving this goal.
The decision has been lauded by industry experts, who believe it will give investors more granular insights into each business segment and provide a better understanding of the company's performance. "This aligns with Zomato's growing focus on its quick-commerce brand Blinkit, restaurant supplies business Hyperpure, and events platform District," said Anupriya Saxena, partner at JMJA & Associates Llp.
Zomato will now be free to explore experimental projects under each of these businesses without risking bets in one brand impacting another. The name change also allows for greater flexibility in managing intellectual property and future acquisitions.
The decision has been likened to Google's rebranding as Alphabet Inc., a move that separated the company's main search engine business from its new parent entity. Similarly, Facebook rebranded itself as Meta Platforms to focus on the metaverse.
However, Zomato's rebranding appears to have more modest ambitions and will primarily be used to strengthen the overarching corporate entity by building focused verticals within. The food-delivery app will continue to be called Zomato, while the new name Eternal Ltd will represent the company's diversified portfolio of businesses.
As part of the rebranding, Zomato is also seeking shareholder approval for the change in its corporate identity and has proposed changing its stock ticker from Zomato to Eternal. Investor experts believe this will provide investors with better insights into each business segment, improving decision-making.
The move comes amid expectations that the company's share price will gain momentum after being included in the 30-stock benchmark index Sensex and is expected to debut on the Nifty 50 as well.