Zomato, one of the biggest companies to emerge from India’s burgeoning startup culture, has grown by unimaginable bounds over the past few years. Not only has it managed to generate gargantuan amounts of revenues, it has also become the go to mode for Indians when it comes to ordering food online, to the point where people have started using the term ‘Zomato’ as a verb. Thus, it’s time to take the next step, and for months, there have been murmurs of an IPO, leading to growing interest among investors. Now, the time is finally here, as Zomato’s initial public offering is set to open next week, on July 14, closing on July 16.
The share price of the company will be set in the range of of ₹72-76 each, BSE disclosures showed. By simple mathematics, Zomato is looking at a massive valuation of $8.56 billion, up from $5.4Bn in February.
The company got SEBI’s seal of approval on July 2nd, and aims to raise about ₹9,375 crore in its first rodeo in the public markets. Out of this, ₹9,000 crore will be raised by a fresh issuance of equity shares, while the rest will be an offer for sale of ₹375 crore by existing selling shareholder Info Edge.
The capital raised will be used to fund organic and inorganic growth initiatives, as well as general corporate purposes.
This IPO comes at a time when ordering online has become the most popular mode of food delivery in India, as the country continues to battle with one wave of the COVID 19 pandemic after the other. During fiscal 2020, Zomato’s revenues grew by over two times, ending up at $394 million (around ₹2,960 crore), compared to FY 2019. Backed by this growing demand, Zomato has been raising huge amounts of capital over the past year, the latest being a $250Mn fundraise back in February.
The food delivery giant has been preparing for this IPO for quite some time, reshuffling its board members and announcing role changes. Back in April, the company announced that it has a board that comprises of 50% women candidates, later appointing former CFO Akriti Chopra as co-founder in June.
With just a few weeks left, Zomato is preparing for what might be the biggest IPO in India this year. If successful, Zomato will set a precedent for the entire startup culture in India, which has not seen a lot of IPOs till date. Thus, this is a huge milestone for the entire industry, and we might see other companies following suite in the coming years.
