The much-awaited IPO of food delivery company Zomato will open on July 14 and close on July 16. According to Securities and Exchange Board of India (SEBI) rules, it will be listed by the end of this month. The price band for this has been kept at Rs 72 to 76. The company has increased the size of its IPO in view of the huge demand among institutional investors.
Zomato recently got a green signal from market regulator SEBI to launch an IPO. The company is expecting to raise around Rs 9,375 crore from the IPO. In the recent past, the company has increased the size of the IPO keeping in view the demand. Also, Info Edge (India) Limited has halved the size of its Offer for sale (OFS) to Rs 375 crore. As per the draft red herring prospectus, fresh shares worth Rs 7,500 crore were to be issued under the IPO, while Info Edge (India) Ltd was to offer shares worth Rs 750 crore.
How much can the valuation reach?
The shares of the company will be listed on both NSE and BSE. As per a few media reports, the company expects that after listing, its valuation can reach $8 to $10 billion i.e., Rs 60 thousand to Rs 75 thousand crores. Zomato's revenue doubled to Rs 2,960 crore in FY20. In February, the company had raised Rs 1,800 crore from Tiger Global, Quora, and others. After this round of funding the valuation of the company was set at $5.4 billion.
Zomato had filed an application for IPO with SEBI in April. According to the draft letter, the proceeds from the issue will be used for the acquisition and expansion of business. Kotak Mahindra Capital Company, Morgan Stanley India Company Pvt Ltd, and Credit Suisse Securities (India) Pvt Ltd are the book running lead managers of this IPO. Motilal Oswal Financial Services and Ventura Securities have given the IPO a 'subscribe' rating, while Kotak Securities and Axis Securities have not given the IPO a rating.
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