2 min read.Updated: 22 Jul 2021, 08:55 PM ISTLivemint
Listing of Zomato shares to get listed tomorrow on BSE and NSE
Many brokerages had recommended subscribe to Zomato IPO, citing long-term growth potential and possibility of listing gains
The share allocation in Zomato's mega IPO has been finalised while the listing of shares on BSE and NSE will happen tomorrow. In the grey market, Zomato shares are quoting at a premium of ₹GMP ₹27, according to market observers. 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.
Investors can also check the status of their application for Zomato shares on BSE website.
Ahead of the IPO, Zomato had mobilised ₹4,196 crore from 186 anchor investors.
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.
LKP Securities, which had recommended subscribe to the IPO, said in a note: "Zomato is a growth oriented company focused on increasing its presence further into every part of the country. FY21 revenues fell by 24% to Rs1,993 crore, the number of orders declined by 41% to 239 million, but order value increased by 43% YoY to almost ₹400. Increase in frequency and number of food delivery by customers due to lockdowns along with lower customer discounts and fees to delivery partners led to contraction in losses in FY21 to 490 crore (excluding exceptional item) from ₹2,251 crore in FY20. Zomato’s unit economic cost has seen an improvement in last four quarters which increased to ₹20.5 in FY21 from loss of ₹30.5 in FY20."
Zomato is being "listed at a revenue multiple of 27x its FY21 revenues whereas global peers trade in the range of 3-19x price to sales. However, the opportunity and scope of further growth is significant for Zomato," the brokerage added.
Naveen Kulkarni, Chief Investment Officer, Axis Securities, said: "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 platform, we expect the company to breakeven at operating levels in FY22, making the IPO more lucrative."
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.