UPDATED: July 8, 2021, 04:09 PM IST
The initial public offering (IPO) of online food delivery company Zomato will open for subscription as early as next week. This is one of the most anticipated IPOs of the calendar year and the largest in over a year.
As the Zomato public offering opens for subscription on July 14, here are some key details you need to know:
ZOMATO IPO, PRICE BAND AND LOT SIZE
Zomato’s Rs 9,375 crore public offering comprises fresh issuance of equity shares worth Rs 9,000 crore and an offer for sale (OFS) of Rs 375 crore by its largest shareholder Info Edge India Limited.
Around 65 lakh equity shares have been reserved for employees of the company. The IPO will open for subscription from July 14 to July 16.
The price band of the IPO has been fixed at Rs 72-76 per equity share by Zomato after consultation with merchant bankers. Investors can subscribe to a minimum of 195 equity shares and in multiples thereafter.
Given the minimum lot size, the minimum bid for the IPO at the higher price band of Rs 76 per share will be Rs 14,820. It may be noted that up to 75 per cent of the total public offering has been reserved for qualified institutional buyers, up to 10 per cent for retail investors and the rest 15 per cent for non-institutional investors.
Some banks managing the IPO sale are Kotak Mahindra Capital, Morgan Stanley India, Credit Suisse Securities, BofA Securities and Citigroup Global.
The online food delivery giant plans to utilise the funds raised from the IPO for funding organic and inorganic growth initiatives and other general corporate purposes.
FINANCIALS & OTHER KEY DETAILS
Zomato’s IPO is likely to do well given the company’s strong growth over the years. The company has seen a rapid rise in revenue across all its business verticals over the past few months but encountered a loss in FY21. While the company closed revenues of Rs 1,367 crore for the first three-quarters of FY21, higher expenses led to a loss of Rs 684 crore.
The food delivery giant’s revenue increased sharply by 96 per cent from Rs 1,398 crore in FY19 to Rs 2,743 crore in FY20. Its business has slowed down due to the pandemic, but analysts are positive about the company’s future, given that it is one of the most dominant players in the food delivery segment along with rival Swiggy.
As of December 31, The company offered its delivery services in approximately 500 cities across the country with more than two lakh delivery partners and over 3.5 lakh active restaurants under its network.
The company’s premium subscription programme ‘Zomato Pro’ has also done well, with over 1.4 million subscribers and over 25,000 Pro restaurants as of December 31, 2020.
It may be noted that Zomato is a professionally managed company and had 74 shareholders as of July 6.
Info Edge is the largest shareholder with an 18.68 per cent pre-offer equity stake, followed by Uber BV (9.19 per cent), AliPay Singapore Holding Pre Ltd (8.39 per cent), Antfin Singapore Holding (8.26%), Internet Fund VI Pte Ltd (6.04 per cent), SCI Growth Investments II (6.03 per cent), and Deepinder Goyal (5.55 per cent) and a few others.