Zomato raises Rs 4,196.51 crore from 186 anchor investors

Gurugram-based online food delivery platform Zomato, on July 13, announced it has raised Rs 4,196.51 crore from 186 anchor investors by allocating 552,173,505 crore equity shares at a price of Rs 76 each.

Zomato told the exchanges that of the total 55.21 crore equity shares allocated to anchor investors, more than 18.41 crore equity shares were allocated to 19 domestic mutual funds mostly through 74 schemes.

SBI Mutual Fund, Axis Mutual Fund, SBI Life Insurance, Aditya Birla Sun Life, ICICI Prudential, and Nippon Life India, among other domestic investors, invested in the company through the scheme.

The other notable investors who purchased shares in the company included New World Fund Inc, American Funds, Tiger Global Investments Fund, BlackRock Global, Lansforsakringar Asienfond, Tokio Marine Life Insurance, Fidelity Funds, JPMorgan, Master Trust Bank of Japan, Morgan Stanley Investment Fund, T Rowe Price, and Canada Pension Plan Investment Board.

Nikhil Kamath, Co-founder, and CIO of True Beacon and Zerodha stated that the Zomato IPO will pave the way for other Indian startups to go public in the Indian market.

“I feel markets are always ready to accept and accommodate good business, everything depends on how the company sustains its growth and profits going forward. The present time post-COVID second wave looks conducive for the IPOs,” Kamath added.

Zomato, led by Deepinder Goyal, plans to raise Rs 9,375 crore through a public offering that includes a fresh issue of Rs 9,000 crore and an offer for sale of Rs 375 crore by its largest shareholder Info Edge. The initial public offering (IPO), which began today, will end on July 16th.

The proceeds of the new issuance would be used to fund organic and inorganic growth initiatives, as well as general corporate purposes.

The online food delivery segment has grown significantly in recent years, with Zomato and Swiggy competing head to head for market share.

Zomato raised $250 million (over Rs 1,800 crore) in funding in February from Tiger Global, Kora, and other investors, valuing the online food ordering platform at $5.4 billion.

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 will be listed on the BSE and NSE.

Zomato’s earnings in the Covid-19-affected first quarter of FY21, from April to June, were $41 million (INR 299 crore), while the loss was $12 million (INR 88 Cr).

Depending on Zomato’s revenue in the first quarter of the current fiscal year, it appears that FY21 will be less profitable than FY20. In all probability, Zomato’s average quarterly revenue will be between $41 million and $45 million, the expected annual revenue for FY21 will be between $165 million and $180 million. In comparison to FY20, the fiscal year 2020-21 may see a revenue decline of approximately 54% to 58% for the company. 

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