Zomato IPO
Zomato IPO Date 2021
Zomato may launch IPO by June, plan to raise 8250 crores, application in SEBI. The IPO will include an offer for sale of Rs 750 crore and a fresh issue of Rs 7500 crore from Info Edge.
About Zomato
Zomato is an online restaurant search site that offers home-access services (home delivery), cafes, in cities such as India, Brazil, Turkey, New Zealand, Philippines, South Africa, Qatar, Chile, Portugal, UAE, Indonesia, UK Canada, etc. Provides information of etc. This site had a world rank of 1,067 in July 2014 and 92 in India.
Deepinder Goyal is the founder of Zomato. Information on 1.2 million restaurants from 23 countries is available on this food website.
Zomato IPO
The online food delivery app Zomato may launch its much-awaited IPO by June. Zomato plans to raise Rs 8250 crore through an IPO. The Food Delivery app has filed Draft Red Herring Prospectus (DRHP) in the market regulator SEBI for its proposed IPO. According to DRHP, Zomato's IPO will include Fresh Equity Shares and Offer for Sale (OFS) of its current shareholder Info Edge Limited. Info Edge Limited is the parent company of Job Portal Naukri.com. It is believed that Zomato's IPO may be the biggest IPO in the last year in the stock market. In a true sense, this will be the first major startup IPO that will come up for listing.
Zomato says that before the IPO, he is also considering a private placement of Rs 1500 crore. In such a situation, it is possible that the size of the company's proposed fresh issue may be reduced. DRHP is the first document to be submitted to SEBI for an IPO. In this, details related to the company are given. The date of formation of the company, details of the business model of the company, and the risk associated with it are detailed.
Zomato IPO Size
The company will raise up to Rs 8250 crore through the issue. There is a plan to raise 7500 crore rupees through a fresh issue, while 750 crores will be raised from the offer for sale. In the offer for sale, investors leave by selling their shares. InfoAge has already announced that it will sell its stake of Rs 750 crore in the issue of Zomato. One reason for the large size of the issue is that after listing, old investors will exit by selling shares at a good price. The face value of every share in the offer has been kept at Rs 1.
What is different in Zomato IPO
It will be different from the general issue in that it will come through IPO rules fixed for companies with losses. In such an IPO, the quota of retail investors is less than the route of profitable companies. In the general IPO, there is a fixed quota of 35 percent shares for retail investors. But, since Jomato is making IPO while in loss, only 10% of the shares will be for retail investors because the company is making IPO while in loss, so investors can be at risk. That is why SEBI has deliberately kept retail quotas low in such companies.
Issue Zomato IPO may be in June
Usually, 21 working days are fixed by SEBI for approval of the issue. If all goes well and no major bottlenecks emerge, the issue may be approved by the end of May. While the issue may come into the market by June if the market conditions are good. For the purpose of raising money, the company has written that the money raised from the issue will be used for organic and organic growth. Organic growth means growth by increasing the existing business. Whereas business size has to be increased by buying other companies through organic growth. The company has written that the use of the IPO amount includes the cost of adding customers and technically the cost of strengthening the platform.
The risk in the Zomato IPO
The company hopes that with the increase in urban population, an increasing number of working families, increasing penetration of the internet and smartphones, the company's business will continue to grow. Whereas in the riskier part, the company has said that the business is at a loss and may have to invest more in the future for growth, in which it is possible that the company may remain in deficit if it does not increase the income against the investment and expenses. Apart from this, in the event of a corona crisis or another such epidemic, the company may face a big challenge.
The problem may arise for the company even if the restaurant partners and delivery partners are out of hand. Apart from this, things like data theft, system failure, sudden change in rules, negative media coverage, competition have also been included in the risk factor. The company has informed that a liability case of about Rs 276 crore is going on against its directors. Apart from this, some taxation cases are also going on against the company.
Investors in Zomato
Zomato includes investors like Ant Financial, Info Edge, Sekoya Capital, Uber. Recently, Zomato transformed itself from a private company to a public company. For this, a change was made in the Memorandum of Association. This was considered to be the next step in the direction of the IPO. On the other hand, the recent IPO news was also denied by Zomato's Foundation. However, it was clear from Jomato's DRHP that the company has moved towards the IPO.
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