In grey market, Zomato shares are quoting at a premium of around ₹27, suggesting possibility of listing gains
Zomato share prices may see a three-digit listing tomorrow, says analyst
Amid several reports, shares of food-aggregator Zomato are set to be listed on the BSE on Friday, the stock exchange confirmed in a notification to members. The debut listing has been advanced by four days and marks a historic moment for India's spirit of startups.
Zomato is expected to make a strong debut on BSE and NSE. In grey market, Zomato shares are quoting at a premium of around ₹27, suggesting possibility of listing gains.
As per the BSE notification, on Friday, the bourses will hold a special pre-open session for the stock for 15 minutes ahead of its listing at 10:00 am.
Zomato will price its shares at ₹76 per share each in its initial public offering.
"With the improved sentiments in primary and broader market I expect Zomato may list in three digits. Zomato's listing will set a benchmark for upcoming start up IPOs," said Abhay Doshi, founder of UnlistedArena.com.
Ahead of the listing, the allotment process for Zomato's shares was conducted today for those investors who had participated in the company’s initial public offering (IPO) last week.
The ₹9,400 crore initial public offer of the food delivery startup - which was India's biggest since IPO March 2020 - was subscribed 38 times. Retail investors bid 7.45 times while qualified institutional buyers or QIBs bid almost 54 times the quota reserved for them and non-institutional investors 35 times. Link Intime India Private Ltd is the registrar of Zomato IPO and investors can check their share allocation on its website.
Ahead of the IPO, Zomato had mobilised ₹4,196 crore from 186 anchor investors. In the grey market, Zomato share are quoting at a premium of ₹GMP ₹23, according to market observers.
The Zomato IPO comprised a fresh issue of equity shares worth ₹9,000 crore and an offer-for-sale (OFS) worth ₹375 crore by existing investor Info Edge (India), which is the parent company of Naukri.com.
The Zomato listing comes when India's markets are near their all-time highs and there is growing interest from digital companies to list on bourses.
Earlier this week, Zomato’s rival Swiggy had closed a $1.25 billion funding round led by SoftBank Vision Fund 2 and Prosus.
The ₹9400 crore IPO of Zomato, which is backed by China's Ant Group, is first in India's food delivery sector. It was priced at ₹72 to 76, giving it a valuation of up to $7.98 billion.
Big institutional investors also placed major bets, with the subscription for their category at 52 times the shares on offer while the retail segment was oversubscribed over 7 times.
Before the IPO, Zomato raised over ₹4,000 crore from 186 big financial investors, including marquee names such as Tiger Global, BlackRock, JPMorgan and Morgan Stanley.
Zomato is mainly a food delivery app, having partnered with 350,000 restaurants and cafes in 526 Indian cities. It also allows customers to book tables for dining-in, write food reviews and upload photos.
It competes with local rival Swiggy, which is backed by Softbank, and Amazon's still nascent food delivery service in a food delivery market that Boston Consulting Group expects will touch $8 billion by 2023, from just $4 billion last year.
While the Zomato IPO saw a strong investor interest, some analysts said the company's valuations were too high, especially because the company does not make a profit.
The startup is valued at an enterprise value that is 25 times sales for 2021.
Zomato has said it will utilise the net proceeds from the fresh issue for funding organic and inorganic growth initiatives ( ₹6,750 crore) and general corporate purposes.
(With agency inputs)
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