Retail investors gulp down Zomato shares
The offer received bids for 75.60 crore shares against an IPO size of 71.92 crore
NEW DELHI: Food delivery platform Zomato’s initial public offering was oversubscribed on the opening day on Wednesday with retail investors bidding for 2.7 times the number of shares reserved for them.
The offer received bids for 75.60 crore equity shares against an IPO size of 71.92 crore, stock exchange data showed.
Retail investors sought 2.69 times the portion reserved for them. Against 12.95 crore shares reserved for retail individual investors, 34.88 crore shares were bid by 5 pm.
Non-institutional investors put in bids for 13% against their reserved portion while 38.88 crore shares reserved for qualified institutional buyers (QIBS) were almost fully subscribed.
Of the 38.09 crore shares sought by QIBS, over 36.84 crore was by foreign institutional investors (FIIS).
The portion set aside for employees has been subscribed 18%.
The IPO, the biggest in India this year, is open for subscription till Friday in a price band of ₹72-76 per share.
Zomato has already mobilised ₹4,196.51 crore from 186 anchor investors on July 13, a day before the issue opened. The IPO size has been reduced to ₹5,178.49 crore from ₹9,375 crore earlier.
The company, backed by Jack Ma’s Ant Group Co, is the first from a long list of Indian unicorn startups to launch an IPO. It is also the first among Indian online food aggregators.
The IPO, which will give Zomato a valuation of ₹64,365 crore, is being touted as the second-biggest since SBI Cards and Payment Services’ ₹10,341 crore issue in March 2020. It will surpass Indian Railway Finance Corp offering in January.
As the IPO opened, the anxiety was reflected in tweets by Deepinder Goyal, the founder of the food delivery app.
“Just ordered a triple breakfast @zomato. Stress eating,” he tweeted.
That was an hour after his first tweet—no words with just a smiley.
His tweet got instant reactions. While the company’s food delivery head Rahul Ganjoo seconded his feeling, Paytm founder Vijay Shekhar Sharma said, “Make it large Deepi ! Best wishes for superb listing. Rooting for you man.” Paytm too is hitting the market with a public offer in a couple of weeks.
“All the best Deep. And I order too much on Zomato .... Way too much!”—wrote Radhika Gupta, CEO, Edelweiss Asset Management Limited.
POST-IPO, the valuation of Zomato will be more than the combined market capitalisation of five listed fast food and restaurant companies - Jubilant Foodworks (the master franchisee for Domino’s Pizza in India), Burger
King India, fast food restaurant holding company Westlife Development Ltd, Barbeque-nation Hospitality and Speciality Restaurants.
The Zomato IPO comprises a fresh issue of equity shares worth ₹9,000 crore and an offerfor-sale (OFS) worth ₹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.
Sanjeev Bikhchandani, the founder of Info Edge, posted a Zomato hall of fame that had pictures of the company’s alumni as well as that of three executives, including Goyal, who had completed 10 years at the firm.