Of the several highly anticipated IPOs of 2021, Zomato is one of the most awaited IPO. Zomato has filed for an initial public offering (IPO) of up to ₹82.5 billion ($1.11 billion). The food delivery startup is backed by China’s Ant Group. The company has seen a tremendous upturn in its fortunes with several people resorting to ordering food online during the COVID-19 pandemic.
Previous Fund Raising
Launched in 2008, Zomato is headquartered in Gurgaon. The company is present in 24 countries and employs more than 5,000 people, according to its website. In February, Zomato had raised $250 million from five investors including hedge fund Tiger Global Management for a post-money valuation of $5.4 billion.
The Zomato IPO
According to the draft papers submitted to India’s market regulator on Wednesday, Zomato’s offering will comprise a fresh issue of shares worth up to ₹ 75 billion. Zomato has stated that it intends to use the proceeds of the IPO to fund growth initiatives and general corporate purposes. Info Edge, the top shareholder, will sell shares worth ₹ 7.5 billion in the IPO. The company, along with domestic rival Swiggy, backed by Accel, dominates the Indian food delivery market. The Indian food delivery market is estimated to be worth a mammoth $4.2 billion.
India has been one of the hottest IPO markets so far in 2021. The IPO craze has been driven by a flood of foreign money and high interest from first time investors who have taken to the stock market due to the pandemic. Several IPOs took off to flying start. However, some such as Barbeque Nation saw a muted response to their stock market listings.
Book Running Managers
Kotak Mahindra Capital, Morgan Stanley India, Credit Suisse Securities India, BofA Securities India and Citigroup Global Markets India are the lead book running managers for Zomato’s IPO.
Zomato said its revenue from operations has grown from ₹466 crore in FY18 to ₹2,604 crore in FY20. This signifies a 5.5X growth over the three-year period. In the nine months that ended December 31, 2020, the company said its revenue from operations stood at ₹1,301 crore. The company acknowledged that it had received the highest gross order volume in the third quarter of FY21.
Stay tuned for more analysis on the Zomato IPO.