India-based food delivery company Zomato has secured approval from the Competition Commission of India (CCI) for its proposed investment in online grocery delivery service provider Grofers India.

The clearance comes after Zomato entered an agreement in June to invest $100m in Grofers, with the aim of adding a grocery delivery section to its mobile app.

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Zomato plans to buy a stake of around 9.3% in each of Grofers India and Hands on Trades (HoT). The transaction also includes the acquisition of certain rights to each of the companies.

In a tweet, the CCI said: “Commission approves proposed acquisition by Zomato of approximately 9.3% stake in Grofers India and Hands on Trades.”

Grofers India, which is backed by Japanese multinational conglomerate SoftBank, will be valued at more than $1bn after the investment.

The investment is in line with Zomato’s strategy to return to grocery deliveries. Zomato’s own online grocery store was relaunched in Delhi’s National Capital Region (NCR).

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Zomato founder and CEO Deepinder Goyal said: “We don’t have much idea [about online grocery] and are just trying to learn. We think it’s a big space, but we are not sure if we want to do it in the long term or not.

“The investment in Grofers is separate. We have our own grocery offering, which is a marketplace model that went live in Delhi two or three days ago.”

Grofers acts as a facilitator for third-party sellers in various sectors, including grocery, fruits and vegetables, bakery items, personal care, health and hygiene and pet care.

HoT is a business-to-business (B2B) wholesale business created to purchase products from brands and manufacturers.

The company provides warehousing services, including food and grocery storage, to third-party merchants.