Indian Economy News

Zomato market cap breaches Rs 1 lakh crore after stellar D-Street listing

  • IBEF
  • July 26, 2021

On Friday, 23 July 2021, Zomato made history as India's first unicorn to list on the stock markets. On the BSE, the scrip was listed for Rs. 115 (US$ 1.54), a premium of 51.32% over the issue price of Rs. 76 (US$ 1.02). The stock debuted on the NSE at Rs. 116 (US$ 1.56), up 52.63%. Zomato has joined the rare club of top 100 listed businesses in terms of market capitalization, with a market capitalization of over Rs. 1 lakh crore (US$ 13.43 billion). Its market cap was approximately Rs. 65,000 crore (US$ 8.73 billion) at issue price; the 100th member's current m-cap is Rs. 44,685.37 crore (US$ 6.00 billion).

Bids for Rs. 2.13 lakh crore (US$ 28.61 billion) worth of shares were received for the Rs. 9,375 crore (US$ 1.25 billion) offering, making it the third-highest in Indian capital history. The listing was pushed back to Friday. Given the high demand for the IPO, experts expected it would list at a premium of 25-30%.

Zomato, a prominent online food aggregator, is a platform that connects customers with restaurants. In FY21, the Zomato platform had an average of 3.21 crore monthly active users (MAUs). There are 389,932 current restaurant listings across the company's 525 cities. As of March 31, 2021, it has 1,69,802 active delivery partners. Apart from India, the firm has operations in 23 countries.

Even though Zomato has grown significantly in terms of sales, with a 62% annual growth rate from FY18 to FY21, the firm continues to lose money. While a few brokerages were wary of the IPO, investors rushed to get their hands on it. The issue was subscribed to 38 times in total. Qualified institutional buyers (QIBs) received 54.71% of the IPO quota, while non-institutional investors (NIIs) received 34.80%. 7.87 times the retail limit was used up.

Managing Director and CEO of Kotak Mahindra Capital, S Ramesh, stated "The IPO of Zomato will pave the way for the IPOs of a slew of other digital technology businesses in the following quarter. It would inevitably encourage entrepreneurship, notably the Startup India movement, allowing for wealth creation and the expansion of our capital markets."

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

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