Food delivery platform Zomato’s Rs 9,375 crore initial public offering (IPO) – India’s biggest this year – will open on Wednesday amid buzz of strong response from global institutional investors. The IPO will be open for subscription till July 16. At Rs 72-76 per share price band, the company aims to raise Rs 9,375 crore through the offer.
The company backed by Jack Ma’s Ant Group Co will be among the first from a long list of Indian unicorn startups to launch an IPO. It will also be the first among Indian online food aggregators.
The IPO, which will give Zomato a valuation of Rs 64,365 crore, is being touted as the second-biggest since SBI Cards and Payment Services’ Rs 10,341 crore issue in March 2020. It will surpass Indian Railway Finance Corp offering in January.
Post IPO, valuation of Zomato will be more than the combined market capitalisation of five listed fast food and restaurant companies.
Jubilant FoodWorks Ltd, which is the master franchise for Domino’s Pizza in India, had a market capitalisaiton of Rs 40,770.52 crore on Tuesday, according to BSE data.
Burger King India Ltd had Rs 6,659.88 crore m-cap, fast food restaurant holding company Westlife Development Ltd (Rs 8,380.89 crore), Barbeque-Nation Hospitality (Rs 3,375.48 crore) and Speciality Restaurants had Rs 336.69 crore m-cap.
The Zomato IPO comprises a fresh issue of equity shares worth Rs 9,000 crore and an offer-for-sale (OFS) worth Rs 375 crore by existing investor Info Edge (India), which is the parent company of Naukri.com, according to the information provided in the draft red herring prospectus.
Sources said the IPO has received a strong response from global institutional investors for its anchor book.
The Zomato IPO will have 75 per cent reservation for qualified institutional buyers (QIBs) and 15 per cent for non-institutional investors (NIIs). The remaining 10 per cent of the issue will be available for retail investors.
The restaurant aggregator has said it will utilise the net proceeds from the fresh issue for funding organic and inorganic growth initiatives (Rs 6,750 crore) and general corporate purposes.
Zomato’s 2019-20 revenue had jumped over two-fold to USD 394 million (around Rs 2,960 crore) from the previous fiscal year, while its earnings before interest, taxes, depreciation and amortisation (EBITDA) loss was around Rs 2,200 crore.
In February, Zomato had raised USD 250 million (over Rs 1,800 crore) in funding from Tiger Global, Kora and others, valuing the online food ordering platform at USD 5.4 billion (around Rs 40,000 crore).