Mumbai: Zomato’s initial public offering (IPO) for 9,375 billion yen was subscribed 5.06 times on Thursday, the second day of the offering, driven by demand from institutional and retail investors. Wealthy investors got on the sidelines, but bankers expect to take the plunge on Friday – the last day of the offering.
Investor offers for the IPO were received for almost 344.77 billion shares in BSE and NSE combined with an issue volume of 68.14 billion shares.
The portion reserved for private investors was subscribed 4.99 times, the segment of qualified institutional buyers 7.45 times. 48% of the amount reserved for non-institutional investors or high net worth individuals (HNIs) was subscribed. Typically, the HNI bids come on the last day of the offer to keep borrowing costs down. Zomato’s initial public offering was fully subscribed on Wednesday, the day it was launched. The retail segment received more bids than intended for it within an hour of the opening of the issue.
“The IPO of new age companies in the Indian market can attract global investors who have burned their hands on Chinese new age companies,” said Nilesh Shah, MD, Kotak Mahindra Asset Management Company.
“Successful listing of new age companies can re-evaluate many existing companies, which can pull the market up from current levels.”
The IPO price is between Rs 72 and Rs 76 per share with a face value of 1 Re each. The offering includes a reissue of Rs 9,000 billion worth of shares and an OFS offering of Rs 375 billion by existing investor Info Edge (India).
The company had raised Rs 4.197 billion from 186 anchor investors on Tuesday prior to the IPO opening by allocating Rs 55.22 billion at Rs 76 per share.
The participation of anchor investors in the Zomato issue is the highest ever. 74 anchor investors took part in the IPO of SBI Cards & Payment Services in March 2020.