Everything about Zomato IPO

History

Zomato was established in 2010 as just a restaurant finding platform. Over the years, the young online startup expanded its services and is today one of the largest online food delivery platforms in India. It has currently expanded its territory to 24 countries including India. Its active restaurant partners have grown to over 1.5 lakhs in the fiscal year 2021 as compared to 94,286 in the fiscal year 2019. The average order value on this platform has risen from Rs 264 in 2020 to Rs 395 in 2021.

Zomato also boasts of having the largest local delivery networks in India with almost 1.7 lakh delivery partners. It’s units are making Rs 20.5 per order from the previous fiscal year. But it also suffered a loss of Rs 30.5 per order in the fiscal year 2020. However, the company has been suffering losses over the last three years.

About the IPO

The IPO issue size is Rs 9375 crores. Of this, Rs 9000 crores is a fresh issue which will be used for the company’s organic and inorganic growth. The remaining Rs 375 crores is an offer for sales. The IPO will be allocated to Qualified Institutional Buyers(QIB), Non-Institutional Buyers(NIB) and Retailers. Qualified Institutional Buyers are allotted a quota of 75%, Non-Institutional Buyers are allotted a quota of 15% and the Retailers are allotted a quota of 10%.

Price range per share is Rs 72-76. There will be 195 shares per lot and retailers can bid for a maximum of 13 lots for the maximum price. The issuing of IPO’s has already begun on 14 July 2021. As of now the IPO has been oversubscribed by more than 4 times in the retail investors quota. The QIB quota has been oversubscribed by 7 times and the NIB quota has seen an oversubscription of 0.45 times. Overall, the IPO has been oversubscribed by 4.79 times.

It is believed that the company will be a loss making company for the next 2-3 years. Experts say that this IPO is not suitable for retail investors. Only people with high risk appetite and those who are willing for long term holdings are advised to go for this IPO. Going ahead, the subscription for this IPO will be available for one more day from 10 am till 5 pm on Friday, July 16, 2021.

The allotment of this IPO will begin on Thursday, 22 July 2021. To the investors who didn’t get allotted, the refund will be initiated on Friday, July 23, 2021. Investors who have been allotted will get their shares on their respective demat accounts on Monday, July 26, 2021. The shares will be listed publicly for exchange from Tuesday, July 27, 2021.

Allotment of IPO’s is random and not based on first come first serve. But being too late is also not good for the allotment. To get higher chances of allotment, make sure that you apply early and apply from different demat accounts. If a person has applied for more than one time with the same PAN card, then all of his applications will be rejected. Buy the shares of it’s parent company to ensure more chances of subscription.

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