Food delivery service Zomato opened its IPO on 14th July 2021, with over 36% of shares offered being subscribed in the early hours. Against a 71.92 crores IPO, the offer received bids worth 26.10 crores equity shares.
Retail investors sought 1.91 times the amount set aside for them. By 1:30 p.m., 24.76 crore shares had been bid against 12.95 crores reserved for retail individual investors. Non-institutional investors made bids for 7% of the part reserved for them.
Employees' shares were subscribed by 6%, while qualified institutional buyers bid for 2.69 lakh equity shares out of a total of 38.88 crore equity shares allotted for them. The IPO, the largest in India this year, will be priced between Rs 72 and Rs 76 per share.
On July 13, a day before the offer opened, Zomato had already raised Rs. 4,196.51 crores from 186 anchor investors. The IPO's size has been lowered from Rs. 9,375 crores to Rs. 5,178.49 crores. The business, funded by Jack Ma's Ant Group Co, is the first of several Indian unicorn companies to go public. It is also among the first online food aggregators in India.
Zomato's IPO, which would value the company at Rs. 64,365 crores, is expected to be the second-largest after SBI Cards and Payment Services' Rs. 10,341 crores offering in March 2020. It will surpass the January offering by Indian Railway Finance Corp.
Post-IPO, Zomato’s market capitalization will exceed that of five publicly traded fast food and restaurant companies: fast food restaurant holding company Westlife Development Ltd, Jubilant FoodWorks Ltd (the master franchisee for Domino's Pizza in India, Burger King India), Barbeque-Nation Hospitality and Speciality Restaurants.
According to the draft red herring prospectus, the Zomato IPO consists of a fresh offering of equity shares worth Rs. 9,000 crores and an offer-for-sale (OFS) for Rs. 375 crores by current investor Info Edge (India), which is the parent company of Naukri.com.
The restaurant aggregator stated that the net proceeds from the new issuance would be used to support organic and inorganic expansion efforts (Rs 6,750 crores) as well as general company purposes. Zomato is present in 525 cities across India, as of March 2021, with 3,89,932 active restaurant listings and a presence in 23 countries beyond India.
Source: BW Online Bureau