Zomato Delivers a Hot Listing. Did You Grab a Bite?

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  
  • Home
  • Views On News
  • Jul 23, 2021 - Zomato Delivers a Hot Listing. Did You Grab a Bite?

Zomato Delivers a Hot Listing. Did You Grab a Bite?

Jul 23, 2021

Zomato shares have made a stellar debut on the bourses after the share listing was advanced from the scheduled 27 July.

The shares of the food startup opened at Rs 116 on the NSE, a 52.6% premium to its final offer price of Rs 76.

The listing price on the BSE was at Rs 115, up 51.3%.

Ahead of the listing, Deepinder Goyal, Founder, Zomato had expressed optimism about the company.

In a tweet, Deepinder Goyal said,

  • The future looks exciting. I don't know whether we will succeed or fail - we will surely, like always, give it our best.

Kotak Mahindra Capital, Morgan Stanley India, and Credit Suisse Securities (India) were the global coordinators and book running lead managers (BRLMs).

Link Intime India was the registrar of the issue.

--- Advertisement ---
Govt's 257 Bn Rupees Boost for EVs- Your Chance for Potentially Wild Profits

A few days back, the government announced that it will be pumping a whopping 257 billion rupees into electric vehicle initiatives by 2025.

We urge you to become a part of the EV gold rush that's happening now and gain the early mover advantage.

We have closed in on 3 EV stocks which could potentially hand you over insane profits in the long run.

We will be revealing all the details in one of our upcoming special online event.

Sign Me Up For the FREE Event

Zomato market cap breaches Rs 1 tn after stellar D-Street listing

The food delivery start-up scripted history on Friday by becoming India's first unicorn to debut on the stock exchanges.

With its mega listing, Zomato entered the elite club of top 100 listed companies in value terms, with a market capitalisation of over Rs 1 tn.

At issue price, its marketcap stood nearly at Rs 650 bn. The 100th member's current marketcap is Rs 446.9 bn.

That apart, the listing was in line with analysts' expectations despite the rich valuations.

First listing in the food delivery segment, positive market sentiment, healthy demand from investors, consistency in gaining market share, and expected improved financial performance can be attributed to the debut premium.

Market participants grabbed every piece of the public offer

Zomato's Rs 93.8 bn offer had received a stupendous response from the investing community. The initial public offering (IPO) was subscribed 38.3 times.

The portion reserved for qualified institutional buyers (QIB) was subscribed 51.8 times, non-institutional investors attracted 33 times subscription and retail segment, 7.5 times.

The restaurant aggregator and food delivery company's primary market offering consisted of a fresh issue of Rs 90 bn and an offer for sale of Rs 3.8 bn by the promoter, Info Edge India.

The anchor book had also garnered a strong response ahead of the IPO. Zomato raised Rs 42 bn from 186 anchor investors, including New World Fund Inc, American Funds, Tiger Global Investments Fund, and BlackRock Global.

Learn: How to Potentially Accumulate Rs 7 Crore in Wealth Over the Long-term

What Zomato CEO said about rival Swiggy in his letter to shareholders

Ahead of its much-anticipated stock market debut on Friday, Zomato founder and CEO Deepinder Goyal shared a letter that he has written to shareholders in a blog post because he wanted to share something with the shareholders as well as India's startup ecosystem, on the day of Zomato's listing.

In his letter, Goyal mentioned rival Swiggy, talking about how he believes Zomato and Swiggy are two of the best food delivery apps in the world.

'India is a tough market to operate in, but if you are building to succeed in India, you are already exceptional. I say that because I believe Zomato and Swiggy are two of the best food delivery apps in the world today. We have a long way to go before we can call ourselves world class by our customers' standards, but we are determined to get there,' he said.

Swiggy recently said that it has raised US$1.3 bn from investors, including SoftBank and Prosus, nearly matching the funds raised by rival Zomato in an IPO, as the two companies battle to dominate India's food delivery market.

To read the full letter, please click here: Letter from Deepi

Financial snapshot and company's reach across India

A leading online food aggregator, Zomato offers a platform for connecting consumers with restaurants.

On average, 32.1 m monthly active users (MAUs) visited the Zomato platform in the financial year 2021.

The company has a presence in 525 cities and has 3.9 lakh active restaurant listings.

It also had 1.7 lakh active delivery partners as of March 31. Other than India, the company has footprints across 23 countries.

Despite Zomato gaining significant scale in terms of revenue by clocking 62% annual growth over the financial year 2018-2021, the company continues to incur losses.

--- Advertisement ---
Meet Rajeev Thakkar: The Man Who Introduced Us Indians to Global Stocks...

Rajeev Thakkar is A Successful Stock Market Investor and CIO of a Top-Ranked Mutual Fund...

He is also among a few rare Indian mutual fund managers who invest not just in Indian stocks...BUT STOCKS ACROSS THE WORLD.

And his keen eye for hunting out undervalued companies by employing a disciplined approach has been instrumental in his fund's stellar performance.

... Thanks to a new approach he developed: Value Investing 3.0

Find out how can you apply the principles of Value Investing 3.0 to protect or grow your wealth when you Register for The Equitymaster Conference Right Now

The company's losses widened from Rs 1.1 bn in 2018 to Rs 23.9 bn in 2020. It's burning cash to get a strong foothold in the market.

While the loss is primarily on account of high expenses, it has resulted in negative cash reserves for the company, rendering a poor return on capital employed (ROCE).

However, the company's sales have grown consistently. Zomato reported a 465% jump in total revenue from Rs 4.6 bn in 2018 to Rs 26 bn in 2020.

Its orders have also grown from 30.6 m in 2018 to 403.1 m in 2020.

Zomato Financials (2016-2020)

For more details on the company's financials, check out Zomato's Red Herring Prospectus.

Zomato GMP surges ahead of listing

Online food service major's share price in the grey market was available at a premium of Rs 23 yesterday.

According to the market observers, Zomato IPO grey market premium (GMP) has been continuously rising since 14 July 2021.

Zomato's share prices logged a 130% gain in the grey market ahead of its listing.

About Zomato

Zomato is a technology platform that connects customers, restaurant partners and delivery partners, serving their multiple needs.

Customers use the platform to search and discover restaurants, read and write customer-generated reviews, order food delivery, book a table, and make payments while dining out at restaurants.

On the other hand, the platform provides restaurant partners with industry-specific marketing tools which enable them to engage and acquire customers to grow their business while also providing a reliable and efficient last-mile delivery service.

It also operates a one-stop procurement solution, Hyperpure, which supplies high-quality ingredients and kitchen products to restaurant partners.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...

Equitymaster requests your view! Post a comment on "Zomato Delivers a Hot Listing. Did You Grab a Bite?". Click here!


More Views on News

Why Zomato Stopped its Grocery and Nutraceutical Businesses (Views On News)

Sep 13, 2021

Zomato believes its investment in Grofers will generate better results rather than its in-house grocery effort.

Zomato's Strong Topline and Key Parameters Send Stock Soaring 10% (Views On News)

Aug 11, 2021

Despite bigger losses, Zomato shares rise 10%.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

What Led to the Massive Surge in the Stock of Jubilant FoodWorks? (Views On News)

Aug 18, 2021

Jubilant FoodWorks hits new high, surges 35% in a month on growth prospects.

Jubilant FoodWorks Hits Record High on Strong Sales Recovery in June Quarter (Views On News)

Jul 22, 2021

Jubilant FoodWorks is back in the black, aided by higher revenues despite the second wave disrupting operations.

More Views on News

Most Popular

All You Need to Know About Primary and Secondary Markets

A look at the various types of primary and secondary markets and the key differences between them.

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

India's Top 5 Monopoly Stocks to Watch Out for (Views On News)

Nov 30, 2021

These 5 companies dominate their sectors with a huge piece of the pie.


Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms


Dec 6, 2021 (Close)