SUMMARY
The restaurant aggregator, which is expected to finalise share allotment today, may list by July 23 instead of July 27 as planned earlier
Zomato’s initial public offering (IPO) issue which opened last week (14 - 16 July) was subscribed 38 times generating a INR 2.13 Lakh Cr demand
The company has raised INR 4,197 Cr from 186 anchor investors ahead of the IPO by allocating 552.2 Mn shares at INR 76 per share
Food delivery giant Zomato, which was expected to list on the stock exchanges by 26-27 July, may advance its listing date to Friday July 23, according to reports.
The company is expected to finalise its share allocation later today.
“The listing may be as early as Friday…however, there are multiple processes which are yet to be closed,” sources familiar with the matter were quoted as saying by ET.
Zomato’s initial public offering (IPO) issue which opened last week (14 – 16 July) was subscribed 38 times generating a INR 2.13 Lakh Cr demand. It opened at a price band of INR 72 – INR 76 per share. Retail investors bid 7.45 times while qualified institutional buyers or QIBs bid almost 54 times the quota reserved for them and non-institutional investors 35 times.
The issue comprised a fresh issue of equity of as much as INR 9,000 Cr and an offer for sale (OFS) worth Rs 375 crore by existing investor Info Edge (India). At the upper end of the price band, the company will command a market capitalisation of nearly INR 64,500 Cr.
The restaurant aggregator received bids for a whopping 27.51 Bn shares against an issue size of 681.4 Mn. The company has raised INR 4,197 Cr from 186 anchor investors ahead of the IPO by allocating 552.2 Mn shares at INR 76 per share. In the grey market, Zomato shares are quoting at a premium of INR 23 grey market premium, according to observers.
Zomato IPO Buzz
Founded in 2008 and having raised over $2.1 Bn across several funding rounds, Zomato has now become a household brand in India’s major cities with a presence across food delivery, cloud kitchen access, restaurant supply chain as well as grocery and nutraceuticals.
In the past year, despite the initial hiccups of the lockdown, Zomato managed to shore up its unit economics thanks to food delivery being the only way out for consumers looking at non home-cooked food. The change in behaviour turned the tide in Zomato’s favour.
The IPO prospectus reported that the number of orders on Zomato has increased from 3.06 Cr in FY18 to 40.31 Cr in FY20 and 15.52 Cr in FY21. The average order value has increased from INR 279 in FY20 to INR 398 in 9MFY21 (April-December 2020) and the discounts have also reduced per order from INR 21.7 to INR 7.3 in 9MFY21.
Currently, Zomato’s primary revenue source includes ad sales, food delivery, and Zomato Pro subscriptions. For its next leg of growth, Zomato is now doubling down as a direct service provider for restaurants by offering online discovery, table booking, cloud kitchen infrastructure and B2B raw material supply for restaurants via Hyperpure. It has even indicated the desire to enter food-adjacent categories such as grocery — which it eventually shelved — and now nutraceuticals and health supplements.
Zomato’s successful IPO can pave the way for other major startup IPOs expected to follow in the coming months including MobiKwik, Paytm, PolicyBazaar, Nykaa among others.
