What is your view on the Zomato IPO, now that the price band has also been fixed?
Answer
Answer
On Wednesday, Zomato expanded the IPO size from Rs.7,875 crore to Rs.9,375 crore on the back of robust demand from institutional investors. On Thursday, the IPO price band for the issue was fixed in the range of Rs.72 to Rs.76 per share. As you are aware, the issue will open on 14 July and close for IPO subscription on 16 July. Zomato will consist of Rs.9,000 crore of fresh issue and just about Rs.375 crore as OFS to give partial exit to Info Edge.
At the outset, Zomato is loss-making, like most eCommerce players will be. However, Zomato is backed by the Ant Group of China. Its losses narrowed in FY21 but what really stands out is the reach and the retail delivery franchise that Zomato has built up in a short span of time, which can be leveraged for other revenue streams in the future. That could be the big value driver for Zomato and institutional interest is quite high for the issue.
Zomato is the first of the big guns in the IPO market this year. India saw Rs.32,000 crore from 22 IPOs in the first half of the calendar year 2021. However, Jul-21 alone is expected to cross that amount with mega IPOs like Zomato, Aadhar Housing, and Nuvoco Vistas slated to hit the IPO market in Jul-21. Then, towards the latter part of the year, there are the really mega issues of Paytm and LIC that are also lined up.Subscribe: Yes, you should for a long-term perspective. At present, you can expect a listing gain of 15-20 Rs per share