“Our business is a growth business and hence you need to look at forward-looking projections and where we will be 5 years down the line. Most of the investors had a 10-year view and gave a multiple based on that. Long-term investors were not concerned about the numbers we had in the last 2-3 years but were looking at it from a 5-10 year horizon, and in that context, the valuation is fairly justified.” — Zomato co-founder Gaurav Gupta
The much anticipated public listing of Zomato is just around the corner. It would be the country’s first big public listing from the consumer Internet space. What would be more interesting to watch is the trend it might create, if successful. There are many other unicorns waiting in the wings to list. This will be the 27th public issue in 2021 and the largest IPO in the last 16 months after SBI Card (Rs 10,355 crore) was launched in March 2020.
Offer opens: Wednesday, July 14, 2021
Offer closes: Friday, July 16, 2021
Price band: Rs 72–76 per equity share
Face value: Rs 5 each
Minimum bid lot: 195 Equity Shares and in multiples
Retail investors can apply for a minimum of Rs 14,820 worth of shares and a maximum of Rs 1,92,660 shares at a higher price band of Rs 76 per equity share.
Zomato Limited’s Initial Public Offering will open on July 14, 2021, and the bidding will close on July 16. The anchor book will open for a day before the issue opening, i.e. July 13. The Price Band of the Offer has been fixed at Rs 72 to Rs 76 per Equity Share. Bids can be made for a minimum of 195 Equity Shares and in multiples of 195 Equity Shares thereafter. Up to 75 percent of the total offer has been reserved for qualified institutional buyers, up to 10 percent for retail investors, and the rest 15 percent for non-institutional buyers. The company will finalise the IPO share allotment around July 22, and the funds will be refunded or unblocked from the ASBA account around July 23, 2021. Equity shares issued will be credited to eligible investors’ Demat accounts around July 26, and shares will debut on the bourses on July 27.
The IPO consists of fresh issues aggregating up to Rs 9000 crore and an offer for sale by Info Edge (India) Limited aggregating up to Rs 375 crore. This offer also includes a reservation of up to 65 lakh equity shares for purchase by eligible employees, on a proportionate basis and such portion not exceeding 5% of the post-Offer Equity Share capital of the Company. Retail investors can apply for a minimum of Rs 14,820 worth of shares and a maximum of Rs 1,92,660 shares at a higher price band of Rs 76 per equity share. The company will utilise its net proceeds from fresh issues for funding organic and inorganic growth initiatives and general corporate purposes.
The company is a technology-first organization leveraging artificial intelligence, machine learning, and deep data science to continuously drive innovations on a platform for a community of customers, delivery partners, and restaurant partners. Zomato’s technology platform connects customers, restaurant partners, and delivery partners, serving their multiple needs. Customers use its platform to search and discover restaurants, order food delivery, book a table and make payments while dining out at restaurants. The company also operates a one-stop procurement solution, Hyperpure, which supplies high-quality ingredients to restaurant partners. It intends to expand and strengthen community across its three businesses – food delivery, dining-out, and Hyperpure.
The company’s consolidated loss at Rs 2,385.6 crore widened from a loss of Rs 1,010.2 crore in the previous year. But revenue nearly doubled to Rs 2,604.7 crore from Rs 1,312.58 crore in the same period. Consolidated loss for financial year FY21 stood at Rs 816.43 crore on revenue of Rs 1,993.78 crore. The decline in revenue was largely due to the impact of Covid-19.
IE&M Verdict
- Short-term: Listing gain is expected
- Long Term: Only for those w0ho have patience
Being a professionally managed company, it has 74 shareholders and no group is there that can be called the ‘promoter group’. The prominent ones are – Info Edge (India) is the largest shareholder with 18.68 percent pre-offer equity stake, followed by Uber B V (9.19 percent stake), Alipay Singapore Holding (8.39 percent), Antfin Singapore Holding (8.26 percent), Internet Fund VI Pte Ltd (6.04 percent), SCI Growth Investments II (6.03 percent), and Deepinder Goyal (5.55 percent).
Deepinder Goyal is the Founder and is the Managing Director and the Chief Executive Officer of the company.
