Zomato shares had risen more than 3 percent on Thursday in a weak market. However, the stock gave up most of its initial gains with the fall in the broader market. The stock was down 0.3 percent at Rs 156.15 as of 10:43 am.

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The stock had gained earlier today after a media report said that Zomato is in talks to invest as much as $500 million in Grofers, making it Zomato's largest investment so far in a company.

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The financing will likely value the Albinder Dhindsa-led Grofers at around $1.5 billion, up from $1 billion when Zomato first invested in the SoftBank-backed startup earlier this year with a $100 million cheque, the report said.

The report added that talks are on between the two companies and Zomato might invest the full $500 million by itself.

"There were some discussions with SoftBank and others, but those have not fructified into anything yet," The Economic Times said in the report.

Investment in Grofers would bolster its instant delivery play.

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The company had said in its earnings release recently that it wants to take an investment route to build businesses instead of building them in-house.

Earlier this month, Zomato CEO Deepinder Goyal announced the company's investments in startups such as Curefit, Shiprocket and Magicpin, and said the company will invest another $1 billion into more companies over the next couple of years.

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