Zomato IPO to launch on July 14 with shares priced at Rs 72-76

Zomato Ltd, the Indian food delivery startup backed by Jack Ma's Ant Group, intends to raise $1.3 billion in an initial public offering (IPO), increasing its target by about 14% as demand in its home market grows.

Zomato, which filed preliminary IPO papers with Sebi in April, was given the green light on July 2. Sebi approval is required for any company to launch an initial public offering (IPO), follow-on public offering (FPO), or rights issue.

The IPO will be available for retail subscriptions on July 14 and will close on July 16. The market lot size for that IPO is 195 shares. The company has already set the offer price for its initial public offering (IPO) at Rs 72-76 per equity share. A retail investor can apply for at most 13 lots (2535 shares or Rs 1,92,660).

The sales will be managed by Kotak Mahindra Capital, Morgan Stanley India, Credit Suisse Securities, BofA Securities, and Citigroup Global.

It will be beneficial to Ant Group, which has benefited from its early investments in companies such as Zomato and digital payments startup Paytm, which is set to go public later this year. According to Zomato, the basis for IPO allotment will be completed on July 22 and refunds will begin on July 24.

On July 26, Zomato shares will be credited to demand accounts. The Zomato shares will be listed on July 27th. The proceeds of the new issue would be used to fund organic and inorganic growth initiatives, as well as general corporate purposes.

Deepinder Goyal, the founder, and CEO of Zomato had announced the IPO last year in September. The online food delivery segment has grown significantly in recent years, with Zomato and Swiggy competing for market share.

The number of orders on their platform has grown from 3.06 billion in FY18 to 40.31 billion in FY20 and 15.52 billion in FY21. The average order value has increased from 279 in FY20 to 398 in 9MFY21, while discounts per order have decreased from 21.7 to 7.3 in 9MFY21.

Over the last few months, Zomato's revenue has risen rapidly across all business verticals. For the first three-quarters of FY21, it earned Rs. 1,367 crore in revenue. The food-tech company's expenses were approximately 1,724 crores, resulting in a loss of 684 crores.

Zomato raised $250 million in funding in February from Tiger Global, Kora, and others, valuing the online food ordering platform at $5.4 billion.

Zomato had 3,50,174 active restaurant listings as of December 31. In terms of table bookings, its platform handled 12.2 million covers in fiscal 2020. Every month in fiscal 2020, Zomato had 131,233 active food delivery restaurants.

This month, up to ten companies are expected to file IPO papers. Glenmark Lifesciences, Windlas Biotech, Medi Assist TPA, Tatva Chintan Pharma, Paras Defence, and Seven Island Shipping are among them.

Star Health & Allied Insurance, Sapphire Foods, Northern Arc, Fino Payments Bank, Paytm, Ixigo, VLCC, Sahajanand Medical Technologies, Lava International, and Veeda Clinical Research are also expected to make an appearance with their IPO this year.

Also Read:

• NRAI writes to CCI against special discounting offers by Zomato and Swiggy

Follow IndianStartupNews on Facebook, Instagram, Twitter for the latest updates from the startup ecosystem.