zomatoOne of the leading food delivery application in India, made a bumper listing on the stock exchanges on Friday. zomato share Listed at Rs 115 on BSE during opening, a rise of 51.32 per cent on issue price fixed at Rs 76. On NSE, Zomato shares rose nearly 53 per cent to Rs 116 on debut. Surpassing all expectations, Zomato began its Dalal Street journey on a historic note. The stock was listed as the 43rd largest company in India in terms of market value. With the listing gains, Zomato’s market capitalization touched the Rs 1 lakh crore mark. Zomato was valued at Rs 97,280.23 crore, ahead of companies such as SBI Card, Mahindra & Mahindra and Bharat Petroleum.
Currently, Zomato shares are trading at Rs 125.85, up 10.85% from the listing price and around 66% above the IPO price. “For successful IPO allocation, though the listing is well above expectations, existing investors can hold onto their shares as this new business cycle is expected to grow in the high digits at an early stage. Vinod Nair, Head of Research, Geojit Financial Services, said, “For new and existing investors, the stock price trend may accumulate on a short to medium term basis, given the stable trend.”
“A key factor for the stock price to maintain this momentum is to demonstrate improvement in profitability in the coming quarters. The company is highly expected to convert from the current loss to profit, otherwise the performance will be affected.”
“Zomato going public and great listing is a historic event for Indian start-ups and capital markets. This will be the beginning of a new era where the capital market will welcome a new era, welcoming innovative companies to raise capital and share funds. This will also act as an impetus for many other companies to get listed in India apart from going abroad. There will be many more IPOs from domestic consumer internet and technology companies in the next few months/years. I believe there is enough investor appetite for all these IPOs,” said Subramania SV, chief executive and co-founder, Fisdom.
“Zomato, India’s leading online food delivery company, is firmly listed on the exchanges today with a 53% premium at Rs 116/share against its issue price of Rs 76/share. Its market capitalization crossed Rs 1 lakh crore due to such a stellar debut on the exchanges. Despite a sizable IPO of Rs 9,375 crore and rich valuations, the company witnessed a healthy overall membership of 38x. “There is a lot of imagination in the market for this unique and first of its kind listing,” said Sneha Poddar, Research Analyst, Broking & Distribution, Motilal Oswal Financial Services Ltd.
“Zomato with first mover advantage is placed at a sweet spot as the online food delivery market is at the peak of growth. It has consistently gained market share over the last four years to become the category leader in India in terms of GOV (Gross Order Value). It enjoys a few moats and has begun to play with the economics of scale, with the damage reduced substantially. While it is a bit difficult to predict the growth trajectory at the moment, it is a good bet from a long-term perspective,” Poddar said.
“Given the strong delivery network, high barriers to entry, expected turnaround and significant growth opportunities in Tier-II and Tier-III cities, we remain positive on the stock from a long-term outlook. After a stellar listing, we recommend that short-term investors who were looking for listing gains can exit the stock, while long-term investors can book partial gains,” says Jyoti Roy, DVP, Equity Strategist, Angel Broking Ltd. said. With network, high barriers to entry, expected turnaround and significant growth opportunities in Tier-II and Tier-III cities, we remain positive on the stock from a long-term outlook. Post stellar listing, we recommend that Short-term investors who were looking for listing gains can exit the stock, while long-term investors can book partial gains,” said Jyoti Roy, DVP, equity strategist, Angel Broking Ltd.
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