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Zomato IPO subscribed over 10.7 times, with a valuation of 719 million

Zomato, one of India’s hottest tech startups, dominates the country’s booming app-based grocery delivery market alongside rival Swiggy. AFP

The initial public offering (IPO) of Indian multinational restaurant aggregator Zomato was oversubscribed 10.7 times on July 16, the third and final day of sale, and institutional buyers flocked to drapery stocks of the food delivery platform.

The offer received offers for 7.7007 billion shares with an IPO volume of 719.2 million, as stock market data showed.

Private investors were looking for 6.09 times the portion reserved for them. Of the 129.5 million shares reserved for retail investors, 788.7 million shares were offered by 1:00 p.m. (0730 GMT).

Non-institutional investors have submitted offers for 1.0982 billion shares in exchange for their reserved portion of 194.2 million. Qualified Institutional Buyers (QIBs) were looking for nearly 15 times their quota of 388 million shares.

42 percent of the portion reserved for employees is subscribed.

Zomato mobilized Rs 41.9651 billion ($ 560 million) from 186 anchor investors on July 13, the day before the issue opened. The IPO was reduced from 93.75 billion to 51.7849 billion rupees.

India’s largest IPO opened for subscription on July 14th at a price range of Rs 72 to Rs 76 per share.

Zomato – the subsidiary of Uber and Jack Ma’s Ant Group is one of its existing shareholders – is one of the hottest tech startups in the country and, alongside competitor Swiggy, dominates the booming app-based grocery store in India.

There are high expectations for the growth of the grocery delivery market in the country of 1.3 billion people and Zomato and Swiggy delivery drivers are ubiquitous in Indian cities.

But there are also concerns that companies like Zomato and Swiggy, which are not yet profitable due to high start-up and marketing costs, could be overrated.

Zomato, which operates in 525 Indian cities and more than 32 million Indians visit the platform every month, lost 8.16 billion rupees in the fiscal year ending March 2021.

“Zomato has suffered significant losses and may continue to suffer losses [the] also in the near future, as the deal is still nascent, ”Mumbai-based investment services firm Motilal Oswal said in a pre-IPO statement to clients.

Around 30 Indian companies have announced IPO plans this year, including digital payments company Paytm, which is backed by Japanese SoftBank as well as Ma.

Zomato’s offering, along with Paytm’s, is expected to lead the Indian IPO market to its best year on record.


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