In what surely is, perhaps the biggest day for India’s rapidly evolving technology startup ecosystem, Zomato, one of the country’s first-generation startups, successfully listed today on public markets after over a decade’s worth of operations. And the fact that the company saw a massive 38x over-subscription of the IPO, along with an 51.32% premium listing today, is a signal that perhaps India is ready to deal with loss-making but rapidly evolving tech startups in the country, especially on public markets.
Ahead of the listing, Zomato CEO and co-founder Deepinder Goyal tweeted that the future looked exciting and while they did not know whether they would succeed or fail, they would surely, “like always,” give their best. “The tremendous response to our IPO gives us the confidence that the world is full of investors who appreciate the magnitude of investments we are making, and take a long term view of our business,” he said, adding that they were going to “relentlessly focus on 10 years out and beyond,” and would not alter their course for short term profits at the cost of long term success of the company.
Just ahead of share listing, Zomato shares were trading at a price of ₹105/share, an increase of more than 38% from its issue price offer of ₹76/share. This is in line with expectations that the grey market expected Zomato IPO listing of at around ₹103. Earlier in the grey market on Thursday, Zomato shares were quoted at a premium of ₹23.75 per share. The grey premium market remained stable, and finally, Zomato shares were listed at a premium of 51.32% over the IPO price to come to ₹115 per share.
“We are going to relentlessly focus on 10 years out and beyond, and are not going to alter our course for short term profits at the cost of long term success of the company. The tremendous response to our IPO gives us the confidence that the world is full of investors who appreciate the magnitude of investments we are making, and take a long term view of our business,” said Goyal in a blog post.
He also called today a new Day Zero for the company, while paying respects for those who paved the way for this massive success.
“…we couldn’t have gotten here without the incredible efforts of India’s entire internet ecosystem. Jio’s prolific growth has set all of us up for unprecedented scale. Flipkart, Amazon, Ola, Uber, Paytm – have also over the years, collectively laid the railroads that are enabling companies like ours to build the India of the future. We stand proudly and humbly on the shoulders of giants, and we thank everyone for giving us, and so many other startups, the opportunity to look ahead into the future,” he wrote.
Zomato’s IPO has been the talk of the town in the start-up ecosystem ever since the shares were oversubscribed by 5% on the first day of bidding, coming to end at a record 40.38 times, generating 2.13 lakh crores, the second-highest this year and the third-highest in Indian capital market history.
According to Zomato, the proceeds from the fresh issue would be utilized towards funding organic and inorganic growth initiatives and for general corporate purposes.
According to stockbroker firm Angel Broking, Zomato was likely to command a premium to its global peers.