Version 1: Mygate and AdOnMo to merge as Zomato parent Eternal swaps its stake for Rs 156 crore of shares

The housing society app is joining hands with an ad screen startup. Here is what a merger, a stake and a share swap mean, in plain English.

Picture the lift in your apartment building. While you wait for it, a small screen near the door shows an ad for a new snack. Now picture the app on your parents' phone that tells them the milkman or a delivery rider is at the gate. Those two things, the screen and the app, are about to belong to one company.

On Wednesday, 21 October 2026, Mygate and AdOnMo said in a joint statement that they will merge. Mygate makes an app that gated housing societies use to run their daily life. AdOnMo runs digital ad screens. The same day, Eternal, the parent company of Zomato and Blinkit, approved a deal to swap its whole AdOnMo stake for Mygate shares worth about Rs 156 crore.

There are a lot of business words in that news. Here they are, one by one, in plain English.

First, who are these two companies?

Mygate is a community app for apartment societies. Residents use it to approve guests, track deliveries and book things like the clubhouse. Its platform is used by 60 lakh households across 30,000 residential communities.

AdOnMo is an adtech company. Adtech simply means technology that shows ads. AdOnMo was founded in 2016 and runs a network of internet-connected screens in housing societies, office buildings, tech parks, malls, supermarkets and metro stations. It has more than 55,000 screens across 27 cities, and is present in more than 7,000 gated communities.

What is a merger?

A merger is when two companies join and become one. Think of two lemonade stalls on the same street. One knows every family in the lane. The other owns the best spot near the school gate. If they join, they share customers, space and ideas under one name.

After this merger, the combined company will carry the Mygate name. AdOnMo's founders, Sandeep Bommireddi and Sravanth Gajula, will join Mygate's board as cofounders. A board is the small group of people who make the biggest decisions for a company, a bit like the captain and senior players of a cricket team.

The merger is not done yet. It still needs the usual checks and legal approvals. As per Eternal's filing, the deal is expected to be completed by 5 December, though the companies did not comment on the timeline.

What is a stake?

A stake is the part of a company you own. Imagine five friends chip in to buy a big pizza and one friend pays for two slices out of ten. That friend has a 20% stake in the pizza. Owning shares in a company works the same way. Each share is one small slice.

Eternal had a stake in AdOnMo. It invested Rs 112 crore in AdOnMo in January 2022. Once the merger is done, Eternal will own about 4.4% of the combined company.

The 4.4% figure is on a "fully diluted" basis. That means it counts every share that exists today plus every share that could be created later, for example from special shares that will turn into normal ones. It is the most careful way to measure your slice.

So what is a share swap?

Remember swapping cricket cards at school? You give a friend your card, and they give you one of theirs. No money changes hands. A share swap is the grown-up version. Inc42 reports that the deal is a share exchange rather than a cash payout.

Here are the exact cards being swapped. Eternal will hand over 11,214 Series B compulsorily convertible preference shares and 10 equity shares in AdOnMo. In return it gets 1,84,091 Series C1 compulsorily convertible preference shares and 164 equity shares in Mygate.

That sounds scary, but it is simple. Equity shares are normal shares. Compulsorily convertible preference shares are special shares that investors often get in startups. "Compulsorily convertible" means they must turn into normal shares later, like a coupon that has to be exchanged for the real thing. "Series B" and "Series C1" are just labels for which round of funding they came from.

Four steps: Eternal hands over all its AdOnMo shares, Mygate gives it shares worth about Rs 156 crore, AdOnMo and Mygate become one company, Eternal owns about 4.4% of the merged firm — The swap in four simple steps.

Did Eternal make money on this?

On paper, yes. Eternal put in Rs 112 crore in 2022. The Mygate shares it gets are valued at about Rs 156 crore. That is Rs 44 crore more, or 39.3% higher than its original investment.

But "on paper" is the key phrase. Eternal is not getting Rs 156 crore in cash. It is getting shares that are worth that much today. Like a rare cricket card, their real value depends on what someone would pay for them later.

A counter rises to Rs 156 crore beside two bars, a shorter one for the Rs 112 crore Eternal put into AdOnMo in 2022 and a taller one for the Rs 156 crore value of its Mygate shares — Rs 112 crore in 2022, about Rs 156 crore in Mygate shares now.

How big is Mygate's business?

A company's turnover is all the money it brings in from sales in a year, before paying any bills. Mygate's turnover was Rs 229 crore in FY26, up from Rs 171 crore in FY25 and Rs 96 crore in FY24. FY26 is the money year that ended in March 2026. So in two years, Mygate's sales more than doubled.

Mygate also has fresh money in the bank. Shortly before this merger, it raised Rs 225 crore from Dharana Capital, an investment firm.

Three bars compare Mygate's turnover: Rs 96 crore in FY24, Rs 171 crore in FY25 and Rs 229 crore in FY26 — Mygate's yearly sales, as reported by Eternal.

Why do ads and an apartment app fit together?

Think about where people spend time every day: the lobby, the gate, the lift, the clubhouse. The two companies say the combined firm can give resident welfare associations (RWAs, the committees that run housing societies) a community app plus a quiet way to earn money from common areas such as lobbies, gates, clubhouses and elevators.

In simple words: a society can let brands show ads on screens in its building, and the society can earn from it. It is a bit like a cricket ground earning money from the boards around the boundary.

Mygate's CEO and cofounder Abhishek Kumar said communities gain screens to share "critical updates and information effortlessly with residents", while the company keeps the trust and privacy residents expect.

AdOnMo's founders said in the same statement that ads in shared spaces could become as smart and measurable as online ads. AdOnMo cofounder Sravanth Gajula told Inc42 that merger talks began about a year ago and picked up speed over the past six months.

This short news clip sums up the merger:

Watch on YouTube

And this clip from an investor podcast explains how Mygate already thinks about ads inside its app:

Watch on YouTube

One more move by Eternal on the same day

Eternal also tidied up its own house. It approved moving its "going-out" business in India to Zomato Entertainment Private Ltd, a company it fully owns, for about Rs 130.76 crore in cash. That business earned Rs 587 crore in revenue in FY26. Eternal said the aim is to make its group structure simpler.

Why should you care?

If you live in a housing society, there is a good chance you already use Mygate, or you have seen a screen in a lift. This deal shows how startups grow up. Sometimes they do not get bought for cash. Instead, they join hands, swap shares like cards, and try to become one bigger player.

It is also a reminder of how investors like Eternal think. They put money in early, and years later they may swap that slice for a slice of something larger.

As it was first published

Mygate and AdOnMo to merge as Zomato parent Eternal swaps its stake for Rs 156 crore of shares