Zomato's Relief After NCLT Rejects Insolvency Petition Regarding Alleged Unpaid Debts

According to reports, the National Company Law Tribunal (NCLT) has granted Zomato relief. NCLT rejected an insolvency petition brought by B2B maker Nona Lifestyle against the foodtech giant for an alleged INR 1.64 Cr in unpaid debts. According to a media report, a panel consisting of Technical Member Reena Sinha Puri and Judicial Member Ashok Kumar Bharadwaj denied Nona Lifestyle's petition on March 3 to reinstate an insolvency claim that the company had made the previous year. The petition was submitted without the required notice under section 8 of the Insolvency and Bankruptcy Code (IBC). Hence, in the absence of these documents, the court determined that it was not maintainable in and of itself.

Claims Made by Petitioner Nona Lifestyle

The petitioner (Nona Lifestyle) claimed that the Deepinder Goyal-led company had fallen behind on payments. Owing to this issue, Nona filed an insolvency plea in October 2024 and asked the NCLT to restore it. Days later, the insolvency case was dismissed. The issue began in 2023 when, in preparation for the ICC World Cup, Nona Lifestyle secured large orders from Zomato. This order was for t-shirts and pants for Zomato's staff and delivery partners. According to Nona Lifestyle, the business refused to take orders later. In October 2024, Nona Lifestyle first approached the NCLT to begin insolvency proceedings against Zomato; however, the plea was denied on the grounds of non-prosecution. To reinstate the insolvency procedures, the petitioner submitted a second request to the NCLT a month later.

However, according to the outlined agreement, the petitioner claimed to have fulfilled its promise to manufacture and deliver the articles in parts. But according to Zomato, the manufacturer changed it "unilaterally" and missed deadlines, creating "substantial reputational and goodwill damage" to the business and endangering its World Cup campaign. A B2B platform for procurement as a service, Nona Lifestyle connects manufacturers and suppliers to acquire and deliver industrial goods for a range of industries, including logistics, hospitality, and fast-moving consumer goods. Zomato must be feeling somewhat relieved by the decision, but it still faces additional difficulties.

Zomato’s Sluggish Growth

The company's food delivery division has been growing slowly over the past two quarters of the fiscal year, which ended on March 31, 2024–2025 (FY25). In the second quarter of FY25, Zomato's gross order value (GOV) for the food delivery company increased by barely 4% on a quarter-over-quarter (QoQ) basis to INR 9,690 Cr. In contrast, the GOV only climbed by 2.3% to INR 9,913 Cr in Q3 of FY25. Additionally, during the assessment period, the company's transacting user base grew slowly. Its transactional user base increased by only 2% QoQ to 20.7 million in Q2 FY25, while it subsequently decreased by 0.9% to 20.5 million in Q3 FY25. The company's bottom line was affected by this downturn. Its consolidated net profit fell 57.2% to INR 59 Cr in Q3 FY25 from INR 138 Cr in the same period last year.