On Wednesday online food delivery giant Zomato’s opened its IPO at Rs 9,375 crore and received a strong response from retail investors.
The bidding issue crossed the halfway mark by 3 pm IST on the first day as reported by The Economic Times. Quoting data from the BSE and NSE, the report said that the Zomato IPO quota was subscribed 2.34 times by retail investors.
The portion reserved for QIBs was subscribed at 20 percent and quotas reserved for non-institutional investors and employees were subscribed 9 percent each.
The report added, Zomato issue had attracted bids for 39,98,37,165 shares and currently almost 56 percent of the total issue size of 71,92,33,522 equity shares. Ahead of the IPO, Zomato has now raised Rs 4,197 crore from 186 anchor investors.
As of March 2021, Zomato was previously present in 525 cities in India, with 3,89,932 active restaurant listings along with a presence in 23 countries outside India.
The brokerage from yes Securities advised the IPO on listing gains is, “The IPO is expected to generate a lot of interest given the company uniqueness, large opportunity size and some evidence of scale economies, but the valuations look really expensive on conventional parameters at 25x FY21 EV/sales versus 10x for global peers and 12x for Indian quick services restaurants, with the path to profitability also unclear.”
It added that “While the current frenzy should deliver some listing gains, we would await more clarity on capital allocation plan and also to provide a more nuanced fundamental view on the company.”
