{"id":133103,"date":"2021-07-23T02:43:49","date_gmt":"2021-07-23T02:43:49","guid":{"rendered":"https:\/\/precoinnews.com\/?p=133103"},"modified":"2021-07-23T02:43:49","modified_gmt":"2021-07-23T02:43:49","slug":"zomato-to-debut-on-the-stock-market-today-4-days-ahead-of-schedule","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/business\/zomato-to-debut-on-the-stock-market-today-4-days-ahead-of-schedule\/","title":{"rendered":"Zomato to debut on the stock market today, 4 days ahead of schedule"},"content":{"rendered":"
Through the IPO, Zomato has raised Rs 9,000 crore in fresh capital.<\/strong><\/p>\n <\/p>\n India’s first unicorn Zomato will make its stock market debut on Friday, marking a historic moment for the domestic capital market.<\/p>\n As per initial schedule, Zomato’s listing was to take place on July 27.<\/p>\n However, investment banks managed to complete the share allotment and listing formalities ahead of the deadline.<\/p>\n Under the Sebi framework, the timeline between IPO closing and listing has to be six working days.<\/p>\n Zomato’s IPO had closed on July 16.<\/p>\n The stock is expected to do well going by the huge demand generated in its IPO.<\/p>\n Zomato’s public offering had seen nearly 40 times more demand than shares on offer and garnered bids worth over Rs 2 trillion—among the highest for domestic IPOs.<\/p>\n Market players said given the stellar response the grey market premium for Zomato’s shares have shot up from 15 per cent during the IPO to 30 per cent at present.<\/p>\n If grey market activity is anything to go by, the stock is expected to list around Rs 100 per share.<\/p>\n The online food delivery company has fixed the issue price at Rs 76 per share, which will value the company at nearly Rs 60,000 crore.<\/p>\n Through the IPO, Zomato has raised Rs 9,000 crore in fresh capital.<\/p>\n The issue proceeds will be used for funding organic and inorganic growth initiatives.<\/p>\n After the IPO, Zomato will have cash of Rs 15,000 crore on its balance sheet, which the company says will give it a long runaway to pursue growth.<\/p>\n Between FY18 and FY20 Zomato’s losses have widened from Rs 107 crore to Rs 2,386 crore.<\/p>\n However, the cash burn has helped the company grow its top line five times from Rs 466 crore to Rs 2,605 crore.<\/p>\n Given the lack of profitability track record and uncertainty around when the company would turn profitability, some investors had given Zomato’s IPO a miss.<\/p>\n Most brokerages, however, had recommended their clients to subscribe to the IPO.<\/p>\n At Rs 76 per share, Zomato is valued at 29.9 times its FY21 sales.<\/p>\n Going forward, industry delivery percentage to net-revenue stands at 5 per cent and with the Zomato average order value of Rs 400 (Rs. 20 per delivery) the company is well poised and it is also placed at a sweet spot as the first mover advantage in the online food delivery market.<\/p>\n “Additionally, given the strong network effects, increasing frequency of order, huge scope for growth in tier-II and tier-III cities and large addressable market, we recommend a subscribe (short term) rating to the IPO,” Anand Rathi had said in an IPO note.<\/p>\n