zomatoThe food-delivery giant will hit the market with its initial public offering (IPO) next week. The Rs 9,375 crore IPO is scheduled to open on July 14. This will be the second largest IPO ever. IPO Which was launched in the last 16 months after the SBI Card IPO, which was in March of 2020 at a valuation of Rs 10,355 crore.
Having said that, here are the top 10 things to know about this historic public issue.
1) Public issue: The IPO will involve a public offer of Rs 9,375 crore. It has been split into a fresh issue, valued at Rs 9,000 crore and an offer for sale (OFS) of Rs 375 crore by its existing shareholder – Info Edge.
The offer will officially open on July 14. The bidding will continue till the last date fixed on July 16. In case the anchor book is likely to open, it will be a day before the opening of the public issue, which is July. 13, as per a report by Moneycontrol. According to the Economic Times, the date of IPO listing is likely to be till July 27.
3) Price Band: The fixed price band of the public issue is Rs 72 to Rs 76 per equity share.
4) Zomato Lot Size: Investors can subscribe to a minimum bid of 195 equity shares or in multiples. Retail investors can bid for a limited number of 13 lots at the upper end of the price band of Rs 76 per equity share. As per data from IPO Watch, the minimum lot size of 195 shares has a minimum lot size of Rs 14,820, while the maximum bid is Rs 192,660 with 2535 shares.
5) Objective of the issue: Zomato aims to use the net proceeds from the public issue to fund its organic and inorganic growth, which is estimated to be around Rs 6,750 crore. As per a Moneycontrol report, the rest will go towards general corporate use.
6) Retail Investor and Employee Quota: The quota reserved for retail investors’ share in Zomato IPO has been fixed at 10 per cent for retail, 75 per cent for QIBs and 15 per cent for NIIs. There is a quota of 65 lakh equity shares for eligible employees for the employees.
7) Basis of Allocation for IPO: The finalization of the basis of allotment is likely by July 22. Money will start the next day. Parallelly, the credit shares of demat accounts will probably happen on or before July 26, according to The Economic Times.
8) Summarizing the financial position of the company: Zomato grew by 105 percent in FY20. In FY19 the cost increased by only 47 per cent. The food giant’s consolidated loss at the end of the financial year in March 2020 was around Rs 2,385.6 crore. According to Moneycontrol, last year it was just Rs 1,010.2 crore. It is to be noted that the revenue almost doubled to Rs 2,604.7 crore from the previous Rs 1,312.58 crore in the same time frame. In June 2020, the company had revenue of $1.7 million with earnings before interest, tax, depreciation, and amortization (EBITDA) of $1.5 million. The consolidated loss for FY21 stood at Rs 816.43 crore as against revenue of Rs 1,993.78 crore. The report said that the decline in losses is attributed to the effects of the Kovid-19 pandemic.
9) Gray Market Trend: As per the Economic Times report, unlisted stocks were set at a premium of Rs 13-17 in the gray market.
10) Leading Book Running Managers: The issue is being managed by BofA Securities and Citigroup Global Markets. Other major book runners are Kotak Mahindra Capital Company, Morgan Stanley India Company, Credit Suisse Securities (India) Global Coordinator and BLRM said in an ET report.
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