The story of Motilal Oswal's large Zomato bite

Generally, when a company chairperson wants something to be done, it gets done. But that's not always the case with Motilal Oswal fund house . You must give it to Messrs Niket Shah, Rakesh Shetty and Siddarth Bothra for ramping up their Zomato holdings in the last two months, despite their chairman Raamdeo Agrawal previously expressing regret in buying the food delivery platform's stock.

Very rarely would you hear a fund manager complaining about their stock selection faux pas on a public forum, but that's exactly what happened in a 2023 summit when someone as renowned as Agrawal - also the co-founder of Motilal Oswal - famously quipped: "I wouldn't have bothered about Zomato, but fund managers were on my head. A lot of people with better degrees than me convinced me, and I got sucked in."

At the time, the public confession was damning for Zomato but a breath of fresh air for the usually stoic mutual fund industry.

Time heals everything
Fast-forward to the present day, and some of his daredevil colleagues have decided to go against the run of play and build up their Zomato holdings.

Motilal Oswal's mid-cap mutual fund (overseen by Niket Shah, Rakesh Shetty and Ankush Sood) has more than doubled its stake in Zomato, while the flexi-cap fund (managed by Ankush Sood, Niket Shah, Rakesh Shetty and Siddharth Bothra) has increased its allocation by around 55 per cent in the last two months, as shown in the table below.

But to be fair to Motilal Oswal, circumstances might have changed.

At the time of its chairperson's public displeasure, Zomato's hype train had derailed badly, prompting Agrawal to give a more sobering assessment to Economic Times, saying they simply "bought (Zomato) at the wrong point at a wrong price".

However, the fund house's recent bulking up on the food aggregator and delivery business comes hot on the heels of the latter having narrowed its losses in the fourth quarter of 2022-23 and its stock price rising by around 44 per cent in the last three months.

But will their strategy to go heavy on the new-age technology company pay off this time? Only time will tell.

What we always say
We have, for long, been shy about new-age technology companies, and here's a compelling reason why .