Zomato IPO day 1: Retail portion fully subscribed within minutes
Retail investors placed 120.31 million bids against the 129.59 million shares on offer, while the portion reserved for non-institutional investors was subscribed 0.02 times
The retail portion of Zomato Ltd's initial public offering was subscribed nearly 100% within a few minutes of opening. Overall, the issue got subscribed nearly 0.17 times.
The IPO received 124.25 million bids against the issue size of 719.23 million shares, according to stock exchange data.
Retail investors placed 120.31 million bids against the 129.59 million shares on offer, while the portion reserved for non-institutional investors was subscribed 0.02 times. Qualified institutional bidders are yet to apply for the issue.
The issue price has been fixed at ₹72-76 apiece and the offer closes on 16 July. Earlier the firm raised ₹4196 crore from 186 anchor investors.
"Zomato has a robust operating model and a strong market penetration, making it one of the leading food service platforms in India. It's mobile application is the most downloaded application in India, in each of the last three fiscal years. We believe a better service mix and a robust operating model will accelerate the revenue growth momentum. With growth expected to pick up in the forthcoming years after a pandemic, and the rising use of online platforms, we expect the company to breakeven at operating levels in FY22, making the IPO more lucrative" said Naveen Kulkarni, chief investment officer, Axis Securities.
As of 31 December, Zomato had 350,174 active restaurant listings. In terms of table bookings, 12.2 million covers were booked through its platform in fiscal 2020. On an average, in fiscal 2020, Zomato had 131,233 active food delivery restaurants every month.
The number of orders on their platform has increased from 3.06 crore in FY18 to 40.31 crore in FY20 and 15.52 crore in FY21. The average order value has increased from ₹279 in FY20 to ₹398 in nine months to FY21 and the discounts have reduced per order from ₹21.7 ₹to ₹7.3 ₹in the period.
Zomato has seen a rapid rise in revenue across business verticals over the past few months. It clocked ₹1,367 crore in revenues for the first three-quarters of FY2021. The food-tech company’s expenses were about ₹1,724 crore, which resulted in a loss of ₹684 crore.
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