Food delivery start-up Zomato has launched its Rs 9,375-crore initial public offer (IPO) today. The IPO, which is among the largest in terms of issue size, will close on July 16. Amid strong investor interest in the IPO, Paytm Money has introduced a pre-booking allotment service with which orders can be received by the brokerage before the share sale. The brokerage will place those orders during the IPO and successful applicants will have to submit required amount in lieu of shares.
Here's a look at ten things to know before you subscribe to the IPO.
1. The public offer comprises a fresh issue of equity shares of Rs 9,000 crore, and an offer for sale of Rs 375 crore by existing selling shareholder Info Edge. The public issue includes a reservation of up to 65 lakh equity shares for employees of the company.
2. In terms of financials, Zomato is a loss-making company. Zomato has incurred loss of Rs 1,010.51 crore, Rs 2,385.60 crore and Rs 8,16.42 crore in fiscals 2019, 2020 and 2021, respectively. The company expects its costs to increase over time and losses will continue given significant investments expected towards growing company's business.
3. Info Edge, one of Zomato's leading investors, holds 18.55 per cent stake in the IPO. The firm will sell only 50 per cent of its stake worth Rs 375 crore during the share sale. Other investors in Zomato are Uber BV (9.13 per cent), Alipay Singapore Holding Pte Ltd (8.33 per cent), Tiger Global (6 per cent), Sequoia Capital (5.98 per cent), co-founder Deepinder Goyal (5.51 per cent), and Temasek Holdings subsidiary (3.65 per cent).
4. The share sale comprises a fresh issue of shares worth Rs 375 crore and an offer for sale of Rs 9,000 crore by its current promoter Info Edge India Ltd. Total 65 lakh shares have been reserved for employees of the company.
5. The lot size of Zomato IPO is 195 shares for which an investor will have to spend Rs 14,820. A retail individual investor can apply for up to 13 lots (2,535 shares) by spending Rs 1,92,660. The firm will utilise net proceeds from the fresh issue for funding organic and inorganic growth initiatives (Rs 6,750 crore); and general corporate purposes.
7. Zomato raised Rs 4,197 crore from 186 anchor investors on Tuesday. It allotted 55.22 crore equity shares to anchor investors for Rs 76 per equity share. The funds raised from anchor investors are almost 45 per cent of the total issue size.
8. Allotment of shares will be done on July 22 and the stock is likely to be listed on BSE and NSE on July 27.
9. The company has fixed price band for the issue at Rs 72-Rs 76 per equity share after consultation with merchant bankers.
10. Zomato is the largest online food delivery player in India, with dominant market share in delivery and restaurant classified. Zomato was incorporated as "DC Foodiebay Online Services Pvt. Ltd" on January 18, 2010. Its technology platform connects customers, restaurant partners and delivery partners, serving their multiple needs. On the other hand, it provides restaurant partners with industry-specific marketing tools which enable them to engage and acquire customers to grow their business.
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