Zomato made a stellar debut on Dalal Street today. Share of India’s first food unicorn startup opened at Rs 116, 52.63 per cent higher on NSE against issue price of Rs 76. The listing price on the Bombay Stock Exchange was at Rs 115, up 51.32 per cent. Market cap of the firm stood at Rs 1.02 lakh crore on NSE.
The issue received bids for 2,751.25 equity shares against IPO size of 71.92 crore equity shares on offer. A day ahead of IPO, Zomato raised Rs 4,196.51 crore from 186 anchor investors.
Shares in the IPO were offered in a price band of Rs 72-76. The firm has raised Rs 9,375 crore from the IPO.
Post-IPO, the valuation of Zomato will cross the market cap of listed fast food and restaurant firms like Jubilant FoodWorks (master frachisee for Domino's Pizza in India and Burger King India), fast food restaurant holding company Westlife Development LTd, Barbeque-Nation Hospitality and Speciality Restaurants.
Follow the updates on Zomato's listing here:
15:30 pm: Share of Zomato closed 65.59 per cent higher at Rs 125.85 on BSE. Market cap of the firm rose to Rs 98,731.5 crore. The stock hit an intraday high of Rs 138 and ended 8 per cent above the listing price.
15:00 pm: Current valuations seem to be extremely overstretched
"Even though a bumper listing for Zomato was expected, the current valuations seem to be extremely overstretched. This would be marked as a great day for the food tech sector but the real test for Zomato would begin now," said Pavitraa Shetty, Co-founder & Trainer, Tips2Trades.
14:30 pm: Long-term investors can book partial profits
"We had given a subscribe rating to the IPO. Given strong delivery network, high barriers to entry, expected turnaround and significant growth opportunities in tier-II and tier-III cities, we continue to remain positive on the stock from a long term perspective. Post the stellar listing, we recommend that short-term investors that were looking for listing gains can exit the stock while long-term investors can book partial profits," said Jyoti Roy, DVP- Equity Strategist, Angel Broking.
14:05 pm: InfoEdge, an early backer of companies like Zomato and Policybazaar as well as the parent company of consumer-driven platforms like Naukri.com and Jeevansathi.com, acquired data-driven skill assessment platform DoSelect for Rs 21 crore.
13:51 pm: Zomato share was trading strong on NSE in afternoon session. At 1:53 pm, the share rose 65.13% to issue price at Rs 125.55 on NSE.
13:30 pm: Massive growth opportunity for Zomato
According to a report by INDmoney, there is a massive growth opportunity for Zomato in the coming years due to urbanization, increase in choice, and convenience. Over the years, the financials of the company have definitely seen an improvement. Zomato charged 75% more on delivery and earned 44% more commission in the previous fiscal.
13:11 pm: Investors can hold while for fresh investment look for declines
"Zomato had a super listing on the bourses, as given the low penetration, just two large players in the market, falling advertising costs and company’s focus on the domestic market, growth as well profitability after initial cash burn will improve going ahead," Mr. Vikas Jain, Senior Research Analyst at Reliance Securities told BusinessToday.in.
"One can continue to hold and for fresh investment look for declines when the broader markets corrects and gives an opportunity," he added.
12:48 pm: Never been so excited and indifferent at the same time: Deepinder Goyal
12:28 pm: Cash burning Zomato has immense potential, says Aswath Damodaran
"Zomato is a money-losing, cash burning enterprise now, but it has immense market potential and is on track to delivering on a viable business model," said Damodaran, who teaches corporate finance and equity valuation at the prestigious Stern School of Business at New York University.
Listing down the pros and cons, the Indian-origin professor states that given its size, Zomato has access to capital and an augmented cash balance post the IPO even as it continues to burn cash and will need access to capital in the coming years as well to survive.
12:05 pm: ‘Zomato, Swiggy two of the best food delivery apps in the world’: Deepinder Goyal
“I’m a firm believer in India, and where our country will be in the future. India is a tough market to operate in, but if you are building to succeed in India, you are already exceptional. I say that because I believe Zomato and Swiggy are two of the best food delivery apps in the world today. We have a long way to go before we can call ourselves world class by our customers’ standards, but we are determined to get there,” said Goyal.
11:55 am: It is not a 'historical moment', tweets Deepinder Goyal
11:38 am: Share of Zomato was trading at Rs 123.55, up 62.57 per cent on BSE. Market cap of the firm fell to Rs 96,966.42 crore on BSE.
11:15 am: Zomato tweets 'from 'one day' to 'day one'
11:05 am: What should investors do post bumper listing gains?
We recommend investors to book the invested amount and remain invested on the gains. The listing price of Rs.116 implies a market cap of Rs.86,267 cr and with sales of 1,994 cr for FY-21, the company listed at a P/S of 43.3. The run up on the stock price has further stretched the valuations, so one should consider taking the invested amount by selling the appropriate number of shares and remain invested for the remaining shares from a longer-term perspective as long-term growth story of the company remains intact," Saurabh Joshi Research Analyst at Marwadi Shares and Finance Ltd told BusinessToday.in
10:49 am: Share of Zomato surged 68 per cent to Rs 127.75 on BSE. Market cap of the firm rose to Rs 1,00,261.40 crore.
10:30 am: Total 3.25 crore shares have exchanged hands on BSE, while 47.97 crore units traded on NSE, so far
10:18 am: After a stellar debut on Dalal Street today, the market capitalization of food delivery company Zomato has crossed Rs 1 lakh crore mark.
10:11 am: Zomato share was trading 81.58% or Rs 62 higher at Rs 138 against IPO issue price on BSE. Market cap of the firm rose to Rs 1.07 lakh crore on BSE.
10:07 am: Share of India’s first food unicorn startup opened at Rs 116, 52.63 per cent higher on NSE against issue price of Rs 76. The listing price on the Bombay Stock Exchange was at Rs 115, up 51.32 per cent.
Copyright©2022 Living Media India Limited. For reprint rights: Syndications Today