On Friday, Zomato shares made a spectacular stock market debut, debuting at Rs 115 per share on the BSE.
Zomato shares had a great stock market debut on Friday, ending at Rs 126 per share on the NSE on the first day of trading. Zomato’s stock price was up 66 percent, or Rs 50, from its initial public offering (IPO) price of Rs 76.
Zomato shares opened 20% higher at Rs 138, virtually tripling the money invested in the IPO. On the closing bell, the online food ordering platform’s overall market capitalization was Rs 98,211 crore, down from Rs 1 lakh crore earlier in the day.
Zomato shares finished at Rs 125.85 per share on the BSE, up 65 percent or Rs 49.86. On the BSE, 451 lakh shares changed transactions, while the NSE saw 69.48 crore units change hands.
During the 14-16 July, the Rs 9,375-crore IPO was sold in a price range of Rs 74-76 per share. The food-tech unicorn’s big public offering was oversubscribed 38 times, with a strong reaction from all types of investors. Zomato is the first Indian online unicorn to list on the stock exchange.
Since SBI Cards and Payment Services’ Rs 10,341-crore IPO in March 2020, this much-anticipated public offering is the largest to touch Dalal Street.
With new-age technological unicorns on offer for domestic investors, Zomato’s stock market debut has ushered in a new era for Dalal Street; yet, value investors are not clamoring for this piece of the cake.
According to Aswath Damodaran, Zomato’s business strategy is neither original nor ground-breaking, but rather similar to other such platforms around the world. Zomato’s primary market in India, and the potential for growth in that area, is what attracts investors. When compared to markets such as the United States, India’s food delivery service penetration is low, and much lower when compared to China.
The Zomato story, or at least the upbeat version of it, Aswath Damodaran stated, is that as Indians get richer and have increasing web access, the Indian food delivery/restaurant business will boom.
Although Aswath Damodaran believes Zomato is now pricey, he noted that, given its potential, he would have no hesitation in investing in the stock if the price reduces in the near future.
Zomato closed the first day of trading at a price that was 8% higher than the listing price. The stock had a strong first day of trading, refusing to drop below the IPO price.
Zomato’s stock finished at Rs 126 apiece on the first day of trading, up 66 percent from its IPO price of Rs 76. Zomato had a market capitalization of Rs 98,221 crore at the time of closing.
