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After witnessing a stellar debut on the stock exchanges by Zomato, Sanjeev Bikhchandani, Founder of Info Edge, and one of the earliest investors in the food delivery company, believes that massive investors’ response to Zomato’s public listing will open the floodgates for other Indian start-up companies to go for an initial public offer.
“The Zomato IPO is path-breaking because it has broken the mould in several ways. The most important one being that it has shown that a start-up need not domicile and list overseas in order to succeed,” Bikhchandani told BusinessLine .
Info Edge had first invested ₹4.7 crore in Zomato in 2010. Back then Deepinder Goyal, founder of Zomato, was just starting out as an entrepreneur and used to run a website called FoodieBay that allowed users to order food and discover restaurants. Bikhchandani was a frequent user of the site and thought about investing in the website. Not knowing who to contact at FoodieBay, Bikhchandani did a Google search and found Goyal’s email ID as the administrator of the food ordering website.
In July 2010, Bikhchandani sent an email to Goyal offering to invest in FoodieBay and within the next 72 hours, a deal was done between the two. Eleven years later, Bikhchandani’s bet has proven to be right.
The value of Info Edge’s investment has grown over 1,000 times. “Here is the ultimate evidence why India should invest more behind its start-ups and in early-stage VC funds,” Bikhchandani said in a tweet.
“The credit should go to the Zomato team. Our skill lies in merely identifying great teams and putting in money. Money is a commodity. Entrepreneurship is rare,” he added.
Stellar market debut
Zomato’s shares witnessed a stellar debut on the stock market on Friday with shares listing at ₹116 on the National Stock Exchange, offering a 53 per cent premium against its issue price of ₹76 per share. The company’s stock zoomed further post listing, hitting the upper circuit of 20 per cent at ₹138, up 82 per cent from its issue price on the BSE. It closed at ₹125.85, up ₹49.85 or 65.6 per cent on the BSE over the IPO price.
“This will almost certainly bring more funding to Indian start-ups. We expect several other start-ups to get listed in India over the next couple of years,” Bikhchandani added.
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