After receiving approval from SEBI to raise Rs 8,250 crore through an IPO, Zomato saw its shares trade at a significant premium in the primary market.
After receiving approval from SEBI to raise Rs 8,250 crore through an IPO, Zomato, an online food delivery platform, saw its shares trade at a significant premium in the primary market.
Zomato shares were observed bidding at a premium of Rs 16.5 per share on Tuesday, over the tentative price band of Rs 70-72 per share. According to persons who deal in shares of unlisted companies, the shares were selling at Rs 88.5 apiece, representing a premium of 23% over the provisional IPO price.
Zomato is an Indian unicorn startup and its IPO is among those most eagerly awaited. Even before the IPO announcement, there was a lot of excitement on D-Street. According to the market, Zomato’s IPO is expected to have a price range of Rs 70-72.
According to Abhay Doshi, Founder, UnlistedArena.com, which deals in Pre-IPO & Unlisted Shares, “the listing of the unicorn startup will be more in focus with respect to its valuations as the market will probably not value such companies traditionally.” Doshi went on to say that DoorDash Inc., which was recently listed on the New York Stock Exchange, has provided exceptional returns to its investors. This is despite the fact that India is still in its infancy in this industry, with enormous development potential.
Zomato has proven to be a boon to most working professionals who lead fast-paced lives, as well as ordinary folks who stay at home. According to an analyst, Zomato serves cuisine that is freshly made, which is something that many Quick Service Restaurants (QSR) lack. In December 2020, a comparable firm, DoorDash Inc, was offered on the New York Stock Exchange; the issue price was $ 102, and the stock was listed at a premium of 78%; its market price reached $205.97 on February 19, 2021. According to Rajesh Singla, Founder & CEO of pre-IPO consultancy firm Planify India, they foresee a similar response for Zomato.
Info Edge, the parent firm of Naukri.com, owns around 18.55 per cent in the meal delivery platform. A fresh issue of over Rs 7,000 crore is included in the offer.
Zomato raised Rs 1,800 crore in capital from Tiger Global, Kora, and other investors in February this year, valuing the online meal ordering platform at $5.4 billion. It is considered one of the most anticipated IPOs of the year.
