Zomato gets SEBI nod for over $1B IPO

The Securities and Exchange Board of India (SEBI) has approved food delivery company Zomato's initial public offering (IPO) application, paving the way for one of the most eagerly anticipated share sales in recent history.

It will see the listing of one of India's largest startup unicorns, which is funded by marquee private equity firms such as Tiger Global Management, Fidelity, and publicly traded Info Edge India NSE 0.90 percent.

Info Edge, Zomato's largest shareholder, intends to sell a stake worth Rs 700 crore through a public offering, while Zomato will raise the remaining funds through a new share issue.

The Gurugram based company proposed an IPO of Rs 8,250 crore in the draft red herring prospectus DRHP, which Deepinder Goyal led Zomato filed on April 29.

It would entail the company's early and largest backer, Info Edge India Limited, issuing new equity shares worth Rs 7,500 crore and making a Rs 750 crore offer for sale.

The company is expected to go public in mid-July, with a market capitalization of $8.7 billion.

According to information on the company's prospectus, Zomato intends to use the majority of the proceeds for organic and inorganic growth.

The global coordinator and book running lead manager for the issue are Kotak Mahindra Capital Company Limited, Morgan Stanley India Company Private Limited, and Credit Suisse Securities (India) Private Limited.

As merchant bankers for the public offering, BofA Securities India Limited and Citigroup Global Markets India Private Limited have been appointed.

The company's equity shares will be listed on the BSE and NSE.

Zomato founder and CEO Deepinder Goyal told employees last year that the company could go public in the first half of 2021.

It reported a revenue of Rs 2,486 crore for FY20, despite increasing losses to Rs 2,451 crore due to the pandemic, which reduced order volumes and dine-out revenue.

Foodiebay, the food delivery and restaurant aggregator platform founded by Goyal and Pankaj Chaddah in 2008 was renamed Zomato on January 18, 2010.

In the last two decades, only a few Internet companies have gone public in India. Apart from Zomato, Paytm, Policybazaar, Nykaa, and Delhivery are also preparing for a public listing, even as there is speculation about Flipkart and Freshworks going public in the US.

These IPOs will be indicators of how successful India's burgeoning startup economy is, and success may lead to more capital infusion into privatization markets.

Previously this week, the company announced a $120 million investment in online grocery retailer Grofers.

Also Read:

• Grofers to raise funding from IPO bound Zomato
• Ant Group-backed Zomato Eyes $6.4B IPO Valuation
• Softbank may invest up to $450 million in foodtech Swiggy

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