Zomato Ltd IPO

Closed

IPO Subscription Details

  • Open Date 14 Jul
  • Close Date 16 Jul
  • Lot Size 195 Equity Shares
  • IPO Size ₹ ₹ 9375.00 - 9895.83 Cr
  • IPO Price Range ₹ 72 - 76
  • Min Investment ₹ 14040
  • Listing Exchange NSE, BSE
  • Basis of Allotment 22 Jul
  • Refunds 23 Jul
  • Credit to Demat Account 26 Jul
  • Listing Date 27 Jul

Zomato Ltd IPO Subscription Status

Zomato Ltd IPO Subscription Status

Category

Subscription Status
Qualified Institutional (QIB) 51.79 Times
Non-Institutional (NII) 32.96 Times
Retail Individual 7.45 Times
Employee 0.62 Times
Total 38.25  Times

 

Zomato Ltd IPO Subscription Details (Day by Day)

Date QIB NII Retail Employee Total
July 14, 2021 17:00 0.98x 0.13x 2.70x 0.18x 1.05x
July 15, 2021 17:00 7.07x 0.45x 4.73x 0.36x 4.80x
July 16, 2021 17:00 51.79x 32.96x 7.45x 0.62x 38.25x

IPO Synopsis

The issue an offer for sale of ₹375 crores by the company’s early investor—Info Edge—and a fresh issue worth ₹9,000 crores.

The Company proposes to utilise the Net Proceeds towards the following objects:
1.  Funding organic and inorganic growth initiatives; and
2.  General corporate purposes
 

Zomato Shareholding

% Shareholding

Pre-IPO

Post-IPO

Promoter & Promoter  Group

-

-

Public

95.80

96.43

Non Promoter Non Public (Employee Trust)

4.20

3.57

Source: RHP

About Zomato Ltd

According to RedSeer, Zomato is one of the leading Food Services platforms in India in terms of the value of food sold, as of March 31, 2021. During Fiscal 2021, 32.1 million average MAU visited zomato platform in India. As of March 31, 2021, the company is present in 525 cities in India, with 389,932 Active Restaurant Listings. Zomato’s mobile application is the most downloaded food and drinks application in India in each of the last three fiscal years since Fiscal 2019 to Fiscal 2021 on iOS App Store and Google Play combined, as per App Annie’s estimates. While the company had a footprint across 23 countries outside India as of March 31, 2021, Zomato  have taken a conscious strategic call to focus only on the Indian market going forward. Given the large market opportunity in India, the company believes a focused Zomato will enhance the value for all the stakeholders.

Financial of Zomato Limited

Particulars (Rs crore)

FY19

FY20

FY21

Revenue from Operations

1,313

2,605

1,994

EBITDA

-2,243

-2,305

-467

PAT

-1,010

-2,385

-816


Key Points of Zomato:

Choice between sensible growth vs. profitable growth: 
While food delivery companies have historically focused on hyper growth with little focus on profitability, pandemic has shown that such business models can generate profitability on unit economics basis. We expect Zomato to sustain focus on growth, albeit also be prudent about margins. We believe the food delivery market has not yet reached the stage when companies can start thinking about profitability at the expense of growth. 

Creating a food super app or the Indian Meituan? 
With its delivery and dine-out businesses, Zomato is probably the only scaled up app that has offerings that match those of Yelp, DoorDash and OpenTable in a single app. Further, through its B2B supply business, Hyperpure, and potential foray into B2C grocery through Grofers, it is metamorphosing into a food-tech super app catering to a large part of the consumer food chain. With US$2bn in cash post its IPO, Zomato may focus on international expansion in the long term, while venturing into Meituan’s model of offering travel & other services may be tried too.

No room for a third player, strong enough entry barriers: 
Zomato and Swiggy have both raised more than US$4.5bn till date, to reach their current scale. Some players such as Food Panda and Uber Eats, with expertise in food delivery, have already exited the Indian market. We believe the food delivery business cannot be built as an adjacency to another horizontal play and requires razor-sharp focus to drive returns. Hence, any threat from a third, well-funded player is low. Also, a new player would have to compete with existing offerings and differentiate on factors other than pricing, for building a sustainable base.  

Risks:

  • The company has a history of net losses and expects bigger expenses in the future.
  • The COVID-19 pandemic, or a similar public health threat, has had an impact and could further impact the business and financial performance of the company.
  • Failing to retain existing restaurant partners, customers or delivery partners or failing to add new restaurant partners, delivery partners or customers, may have an adverse impact on the business.

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