Zomato’s IPO to open tomorrow: Top things to know before the IPO opens

We will present to you the top things to know about Zomato IPO before it opens.

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Zomato will be the first tech startup to list on Indian bourses post the IPO. Now we will let you know about the top things of Zomato IPO before it opens tomorrow.

Top Things about Zomato IPO

1. Opening & Closing Date

Zomato’s IPO will open for subscription on Wednesday, July 14 and will close on Friday, July 16.

2. Price Brand for Zomato IPO

Zomato IPO’s price band is Rs 72-76.

3. Minimum and Maximum number of shares

Investors can apply for the IPO by bidding for a minimum of 195 shares or multiples thereof. Retail investors can bid for a maximum of 13 lots at the higher and price band.

4. Listing Date

Zomato will be listed by July 27.

5. What Do Experts Say?

As per ICICI Securities, Zomato is yet to turn profitable. It is evolving on the back of favourable macroeconomics, changing demographic profile, rising adoption of tech infrastructure.

According to Motilal Oswal Financial Services, Zomato is placed in a sweet spot as its market is at the cusp of evolution. They are predicting the growth trajectory at this juncture which is a bit tricky for the upcoming years. The valuation also appears expensive at 25x FY21 EV/Sales compared to the average of 9.6x for global peers and 11.6x for Indian QSRs. Investors with a high-risk appetite can subscribe for the listing gains given fancy for unique and first of its kind listing in the food delivery business.

The IIFL says that Zomato is close to reaching profitability and value creation, driven by 5x growth in revenues, and on the path of achieving 15% operating profitability by FY25 (Financial Year 2025). All of this can be lead to:

  1. An improved market structure for the two large players.
  2. Faster adoption of food delivery, catalysed by the current pandemic.
  3. Improved unit cost economics.

IIFL also believes Zomato could trade at around 10 billion USD valuation, based on IIFL’s discounted cash flow (DCF) analysis, and is implying EV/Sales of nearly 11.5x/8.0x on FY23/24 revenues, compared with peers such as US-listed DoorDash.

 

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