Zomato’s IPO: Issue will come at Rs 70-72 per share, will open by July 19-22

Food delivery company Zomato’s IPO date has been fixed. The issue of the company will open from July 19-22. The price of one share can be fixed at Rs 70 to 72. The issue will open for 4 days from the date of Bakrid on July 21. The company will raise Rs 9,375 crore through this.

This is the second largest IPO in the last four years. Earlier last year SBI Cards raised Rs 10,355 crore and before that in 2017 General Insurance (GIC) raised Rs 11,176 crore. Zomato’s IPO will have a primary sale of Rs 9,000 crore, while there will be a share offer for sale of Rs 375 crore. Offer for sale means other shareholders will sell their shares in the company.

The face value of its shares will be Rs. 25% share is reserved for Retail and High Net Worth Individuals i.e. HNIs. According to the upper value i.e. 72 rupees, the valuation of the company is 56 thousand 200 crore rupees. Zomato had submitted a draft to SEBI in April for the IPO and it was approved last week.

Its other shareholders are Uber, Alipay, Antfin Singapore, Internet Fund, SCI Growth Investments and its co-founder Dipinder Goyal. All hold more than 6-6% stake. By the way, there is not much demand for its shares in the unlisted market i.e. gray market. It is trading only around Rs 78 in gray market. That is, there is business at 10-12% more. From this it is also not expected to have good listing and profit.

Zomato recently raised money by selling shares at a price of Rs 55-60. Then its valuation was 40 thousand crores. Right now it is Rs 56 thousand crores. The company will spend Rs 5,625 crore from the IPO money to grow the company and buy other companies. Its total revenue was Rs 487 crore in the financial year 2018 which increased to Rs 2,743 crore in 2020-21. It is in loss of Rs 2,385 crore.

According to the exchange filing, Zomato has investments from Quora Management, Tiger Global Management, Fidelity and InfoEdge. In this, the largest stake (18.4%) is held by Info Edge, which will sell shares worth Rs 375 crore through offer for sale (OFS). The company was earlier going to bring OFS of Rs 750 crore in the issue of Zomato.

In an information given to the exchange on July 4, Zomato said that the company has reduced the size of the offer for sale. Info Edge wants to raise Rs 375 crore through offer for sale. The company had filed a red herring draft prospectus with SEBI in April this year for the IPO.