2 min read.Updated: 06 Jul 2021, 10:37 AM ISTLivemint
Zomato is expected to launch its share sale later this month
India’s most valuable food delivery company Zomato is set to hit the Indian market with its much anticipated initial public offering (IPO). Market regulator SEBI officially gave its go-ahead to the food-tech unicorn to raise fund via the public offering. The company in April had filed its draft red herring prospectus (DRHP) with the market regulator, proposing an IPO of ₹8,250 crore.
Zomato is expected to launch its share sale later this month to become the first of India’s top unicorns to go public.
Zomato is seeking an IPO valuation of $10 billion amid a surge in online food-ordering, restaurant-bookings and subscriptions for Zomato Pro businesses, two people familiar with the development told mint.
An Economic Times report has said that the Zomato IPO is likely to hit markets on July 19. It added that the price band is likely to be in between ₹70-72 per share.
The Zomato IPO will see a dilution of 10-15%, largely through a fresh issue of shares and an offer for sale (OFS) by its early investor Info Edge (India) Ltd.
Info Edge reduced its OFS size in Zomato’s IPO by half to ₹375 crore from ₹750 crore as planned earlier.
Zomato wants to use the IPO proceeds towards acquisitions and organic growth plans.
Several large asset management firms and some existing investors such as Temasek could be coming as anchor investors in Zomato’s IPO.
It's existing investors include Info Edge (18.55%), Uber BV (9.13%), Alipay Singapore Holding Pte Ltd (8.33%), Antfin Singapore Holding Pte Ltd (8.20%), Tiger Global (6%), Sequoia Capital (5.98%), co-founder Deepinder Goyal (5.51%), Temasek Holdings subsidiary (3.65%) and a few others.
It clocked ₹1,367 crore in revenue in the first three quarters of FY21. However, expenses were about ₹1,724 crore, which led to a loss of ₹684 crore Revenue increased by 96% to ₹2,743 crore in the year ended March 2020 from ₹1,398 crore in the previous year.
Kotak Mahindra Capital Company, Morgan Stanley India Company Pvt Ltd and Credit Suisse Securities (India) Pvt Ltd are the global coordinators and book running lead managers to the issue.
BofA Securities India Ltd and Citigroup Global Markets India Pvt Ltd have been appointed as merchant bankers to the public issue. The shares the company will be listed on BSE and NSE.
Zomato will be the first among India’s mega startups to access public markets. Payment services company Paytm; Flipkart, the e-commerce firm now owned by Walmart Inc.; online insurance platform Policybazaar and cosmetics and garments retailer Nykaa are also readying to go public.