Zomato IPO is a Rs 9,375 crore worth initial public offering (IPO). Opening on July 14, 2021, the food delivery and restaurant discovery platform has a price band of Rs 72 to 76 per share. Read to find out everything about the Zomato IPO.
Zomato IPO: All about it
Zomato, the Indian food delivery, and restaurant discovery platform plan to raise Rs 9,375 crore through the newly formed IPO. It comprises a brand new issue of equity shares equal to Rs 9,000 crores. There is an Rs. 375 crore offer for sale (OES) by the existing investors of Info Edge. Moreover, Info Edge is the parent company of the popular job search portal, Naukri.com. The IPO marks a rise of Zomato’s previous Rs. 8,250 crore shares, when the firm filed preliminary documents with SEBI in April 2021. However, the firm got its approval last week to kick start the IPO.
“At the upper end of the IPO price band, the offer is valued at 29.9x of its FY21 market-cap to sales. Going forward, industry delivery percentage to net-revenue stands at about 5 percent and with the Zomato average order value of Rs 400, the company is well poised and it is also placed at a sweet spot as the first-mover advantage in the online food delivery market,” said Anand Rathi, in the IPO note research.
New changes in the post-pandemic era
According to observations made by SEBI, it is important for any form to file and follow up on the public offer (FPR) before launching. With this, Zomato will be the first of consumer-centric internet firms and startups in India to raise public money. The move is a boon in the post-pandemic era. After all, the food delivery app has only shown significant growth in the last few years.
Zomato IPO plans to reserve 75 percent of the shares for qualified institutional buyers. 10 percent of its share is available for retail investors. However, 15 percent of the shares are for qualified institutional buyers. The proceeds from these shares will be solely used to fund organic and inorganic growth initiatives. According to the information published in the red herring prospectus, it will also be for general corporate purposes. Previously, Zomato raised over Rs.4,169 crore. This was solely from its 186 anchor investors and based on equity shares of Rs 76 each.
