Zomato Initial Public offering was subscribed 1.05 times on the first dayFood shipment company Zomato's 9,375 crore share sale by means of initial public offering (IPO) was subscribed 1.05 times on the very first day of the issue, according to membership information on the exchanges.
The IPO opened today- July 14 and will close on Friday, July 16, remaining open for financiers for a duration of three days.
Zomato shares today were in high demand among the retail private investors as the part scheduled for them was oversubscribed within hours of opening.The portion reserved for retail financiers in the IPO was subscribed 2.70 times on Wednesday by 5:00 pm.
The part set aside for the non-institutional financiers (NII) was subscribed 0.13 times, while the part reserved for certified institutional buyers (QIB) was subscribed 0.98 times.
The retail investors can bid in lot size of 195 shares, extending up to a maximum of 13 lots.
The Gurugram-headquartered company has repaired the rate band of the main market offering at 72-76 per share.
The IPO consists of a fresh concern of 9,000 crore and a sell of 375 crore by the promoter - Details Edge India.
Zomato IPO is likely to pave the way for other digital business to go public such as Ola, Paytm, and Flipkart.
Its shares are likely to be noted on stock market BSE and NSE on July 27.
Ahead of the general public deal, Zomato raised 4,196.51 crore from 186 anchor financiers, including BlackRock Global, American Funds, Tiger Global Investments Fund, JPMorgan, Canada Pension Investment Board, Morgan Stanley Mutual Fund, amongst others.The company is now among the leading online food service platforms in regards to the value of food offered.
Zomato will utilise the profits of the IPO to fund organic and inorganic development efforts and for general corporate functions and is likewise the first Indian mega startup to go public.
Zomato charged 75 per cent more on delivery and made 44 per cent more commission in the previous financial.
This was generally due to a rise in orders, and fall in discounts.
The food or dining establishment organization in India only represents 10 percent of India's invest in food.
Due to urbanization, increase in choice, and convenience, there is an enormous growth opportunity for Zomato in the coming years, SEBI-registered Investment Consultant INDmoney stated in a report.
At the higher end of the cost band, Zomato IPO is roughly priced at a Mcap/ Sales of 30 times (based on FY21 data).
This is much greater than its global peers DoorDash and DeliveryHero.
As the online shipment area remains under-penetrated, Zomato is anticipated to command a greater appraisal in India (scarcity premium).
Nevertheless, investors looking to invest should bear in mind that it is a loss-making company and the company has actually plainly shown that it will continue to report losses over the medium-term.
Given the company's market leadership status, strong topline development, robust outlook, and positive sentiment due to marquee financiers, financiers who want to take exposure to an under-penetrated online delivery industry could consider purchasing this issue, added INDmoney.