Zomato’s Rs 9,375 cr IPO on July 14, Sees Rs 64,000-cr post-money valuation

Mumbai | Bengaluru: Online food delivery platform Zomato unveiled its initial public offer (IPO) plan to raise as much as Rs 9,375 crore, the first such share sale by a major consumer internet startup in India. Of the total, Rs 9,000 crore will come from a fresh issue of equity in the July 14-16 offer, and Rs 375 crore from an offer for sale (OFS) by majority shareholder Info Edge, which runs portals such as Naukri, and is Zomato’s earliest backer.

Zomato chief financial officer Akshant Goyal said at the virtual IPO briefing on Thursday that the post-money valuation of the company will be about Rs 64,000 crore at the top of the price band of Rs 72-76 per share. The firm was last valued at over Rs 41,000 crore in February when it raised Rs 1,870 crore from Kora Management, Tiger Global, Fidelity, Dragoneer and Bow Wave.

Info Edge has halved its offer size from the Rs 750 crore it announced in April. Zomato had initially planned to launch its IPO on July 19. The IPO will be the biggest in 14 years after the Rs 9,188 crore DLF issue in terms of fresh issuances. About10% of the issue is reserved for retail investors, 15% for high net worth individuals, and 75% for institutional investors. Bids can be made for a minimum of 195 shares and in multiples of 195 shares thereafter. The offer’s anchor opening and closing is on July13.

Goyal was joined by cofounder Gaurav Gupta who said the IPO comes at a time when the food delivery market is underserved with less than 10% of consumption taking place through restaurants.

Biggest Test for Startups
While the IPO will be an indicator of how public markets regard technology startups in India, it’s taking place just after the second wave of the pandemic, which has had a deeper impact than the first.

Goyal said Zomato’s business is recovering well. FY21 revenue dropped 23% to Rs 1,994 crore from FY20. It narrowed losses to Rs 812 crore in FY21 from Rs 2,363 crore in FY20, according to Securities and Exchange Board of India filings. ET was the first to report on March 3 that Zomato is expected to raise $750 million to $1 billion through its IPO. “We can tell you that fear of the service as we say is completely not there this time because food delivery has been going on without any fears. So I think from that perspective, business has been fine. And we continue to serve customers,” Gupta said.