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Zomato gets SEBI's go-ahead to float Rs. 8,250 crore IPO

IBEF:  July 06, 2021

Zomato, a food delivery platform has obtained SEBI's approval to raise Rs. 8,250 crore (US$ 1.11 billion) through an initial share-sale.

According to draft red herring brochure, the initial public offer (IPO) includes fresh issue of equity shares worth Rs. 7,500 crore (US$ 1.01 billion) and an offer-for-sale of Rs. 750 crore (US$ 100.86 million) by Info Edge (India) Ltd.

In April, Zomato, filed initial IPO documents with SEBI, attained its statement on July 2, an update with the regulator demonstrated on Monday.

SEBI's remark is extremely essential for any corporation to launch public issues like IPO, follow on public offer (FPO) and rights issue.

As per the draft documents, proceeds from the fresh issue would be utilized for financing organic and inorganic growth plans, and general corporate objectives.

In the last few years, the online food delivery segment has witnessed considerable growth with players like Zomato and Swiggy dominating the market.

In FY20, Zomato's revenue registered a 2X growth at US$ 394 million (~ Rs. 2,960 crore).

In February, Zomato had raised US$ 250 million (> Rs. 1,800 crore) in funding from Tiger Global, Kora and others, resulting in the valuation of the company at US$ 5.4 billion.

Morgan Stanley India Company Pvt Ltd., Kotak Mahindra Capital Company and Credit Suisse Securities (India) Pvt Ltd. are the book running lead managers and global coordinators to the issue.

Citigroup Global Markets India Pvt Ltd. and BofA Securities India Ltd. have been selected as merchant bankers to the public issue. The shares the firm will be listed on BSE and NSE.

In 2020, Mr. Deepinder Goyal, Zomato founder and CEO had announced that the firm was intending to go for an IPO in the first half of 2021.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.