Zomato IPO: Check Price Band, Gray Market Premium and more
Food delivery platform Zomato’s Rs 9,375 crore initial public offering (IPO) – India’s biggest this year – will open on Wednesday amid strong response from global institutional investors. The IPO will be open for subscription till July 16. At Rs 72-76 per share price band, the company aims to raise Rs 9,375 crore through the offer.
The company backed by Jack Ma’s Ant Group company will be the first in a long list of Indian unicorn startups to launch an IPO. It will also be the first among Indian online food aggregators.
The IPO, which will give Zomato a valuation of Rs 64,365 crore, is believed to be the second biggest since the Rs 10,341 crore issue of SBI Cards and Payment Services in March 2020. It will surpass Indian Railway Finance Corp’s offering in January.
Post the IPO, Zomato’s valuation will be higher than the combined market capitalization of the five listed fast food and restaurant companies.
Jubilant Foodworks Ltd, which is the master franchisee of Domino’s Pizza in India, had a market capitalization of Rs 40,770.52 crore as on Tuesday, according to BSE data.
Burger King India Ltd had an m-cap of Rs 6,659.88 crore, fast food restaurant holding company Westlife Development Ltd (Rs 8,380.89 crore), Barbecue-Nation Hospitality (Rs 3,375.48 crore) and specialty restaurants had an m-cap of Rs 336.69 crore .
The Zomato IPO consists of a fresh issue of equity shares worth Rs 9,000 crore and an offer-for-sale (OFS) of Rs 375 crore by existing investor Info Edge (India), the parent company of Naukri.com. Information provided in draft red herring prospectus.
Sources said the IPO has received a strong response from global institutional investors for its anchor book.
The Zomato IPO will have 75 per cent reservation for qualified institutional buyers (QIBs) and 15 per cent for non-institutional investors (NIIs). The remaining 10 per cent of the issue will be available to retail investors.
The restaurant aggregator has said that it will use the net proceeds from the fresh issue for organic and inorganic growth initiatives (Rs 6,750 crore) and for general corporate purposes.
Zomato’s 2019-20 revenue grew two-fold to USD 394 million (about Rs 2,960 crore) from the previous fiscal, while its earnings before interest, tax, depreciation and amortization (EBITDA) loss stood at around Rs 2,200 crore .
In February, Zomato had raised USD 250 million (over Rs 1,800 crore) in funding from Tiger Global, Quora and others, valued at USD 5.4 billion (about Rs 40,000 crore).
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