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The IPO of food delivery firm Zomato was subscribed 105 per cent on Day 1 of the issue opening on Wednesday. It received 77.6 crore bids for the 71.9 crore shares on offer.
Zomato intends raising ₹9,375 crore — about ₹9,000 crore in a fresh issue and ₹375 crore via a secondary issue by InfoEdge. The IPO price band is ₹72-76.
According to exchange data, retail category shares were subscribed 269 per cent or 2.6 times with 34.8 crore bids received against 12.9 crore shares on offer. The QIB (Qualified Institutional Buyers) portion was subscribed 98 per cent. The shares allocated to non-institutional investors were subscribed 13 per cent and the employee category 18 per cent.
Anchor investment
Zomato had on Tuesday raised ₹4,197 crore from 186 anchor investors. The company had allotted 55.22 crore equity shares for anchor investors at ₹76 a piece, but got 30-35 times more bids. Top anchor investors included the Government of Singapore, Morgan Stanley Investment Fund, Tiger Global Investment Fund, Baillie Gifford Pacific Fund, Fidelity Fund, New World Fund, Canada Pension Plan Investment Fund and Kotak Flexi Cap Fund.
Zomato’s IPO success has enthused other start-up founders to also think about listing their companies. Harshil Mathur, co-founder of Razorpay, said, “It’s a huge moment for the entire Indian start-up ecosystem.”
Tarun Davda, partner and managing director of venture capital firm Matrix Partners, said: “This is an important milestone for the entire ecosystem and all of us are rooting for your (Zomato) success.”
Kunal Bahl, co-founder of Snapdeal tweeted, “With this IPO the line between customers and investors will get blurred.”
‘Investing in future’
Abhishek Agarwal, Managing Partner, Rockstud Capital, said: “Street might not see fundamental sense on the valuation against their burn due to traditionally valuing companies on a 1/2-year forward earning basis. Here, the approach is not only paying the premium for long-term growth but betting on a company which can further penetrate different needs of the consumer. Their recent delivery model for groceries is an indicator.”
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