Zomato, the food-delivery giant, will be hitting the market with its initial public offering (IPO) next week. The IPO, valued at Rs 9,375 crore, is set to open on July 14. This will be the second-largest IPO that was launched in the last 16 months after the SBI Card IPO, which stood at a valuation of Rs 10,355 crore in March of 2020.
Having said that, here are the top 10 things to know about this landmark public issue going forward.
1) The Public Issue: The IPO will comprise a public offer worth Rs 9,375 crore. This is broken down into a fresh issue that is valued at Rs 9,000 crore and an Offer for Sale (OFS) worth Rs 375 crore by its existing shareholder – Info Edge.
The offer will officially open on July 14. Bidding will continue till the close date which is set for July 16. In the event of the possibility of an anchor book opening, it will be a day prior to the public issue opening, which is July 13, according to a report by Moneycontrol. The date of IPO listing will most likely be by July 27 according to Economic Times.
3) Price Band: The Public issue has a fixed price band of Rs 72 to Rs 76 per equity share.
4) Zomato Lot Size: Investors can subscribe for a minimum bid of 195 equity shares or in multiples. The retail investors can bid for a capped number of 13 lots at the upper end of the price band of Rs 76 per equity share. The minimum lot size of 195 shares carries an amount of Rs 14,820 while the maximum bid stands at 2535 shares with Rs 192,660 as per data from IPO Watch.
5) Objective of the Issue: Zomato aims to use the net proceeds from the public issue to fund its organic and inorganic growth which is estimated to be around Rs 6,750 crore. The rest will go towards general corporate use, according to Moneycontrol’s report.
6) Retail Investor and Employee Quota: The quota reserved for the retail investors’ portion in the Zomato IPO, is fixed at 10 per cent for retail, 75 per cent for QIB and 15 per cent for NII. For employees, there is a quota of 65 lakh equity shares for eligible employees.
7) The Basis of Allotment for IPO: The finalisation for the basis of allotment is most likely going to take place by July 22. The following day the initialisation of funds would take place. Parallelly, the credit shares of Demat accounts will probably take place on or by July 26 as per Economic Times.
8) Company Financials in Brief: In FY20 the Zomato grew by 105 per cent. In FY19 the cost only grew by 47 per cent. The food giant’s consolidated losses at the end of the financial year in March of 2020, stood at around Rs 2,385.6 crore. The previous year it was just Rs 1,010.2 crore, according to Moneycontrol. It should be noted that the revenue almost doubled to Rs 2,604.7 crore from the previous Rs 1,312.58 crore in that same time frame. In June of 2020, the company had revenue of $17 million with earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $1.5 million. The consolidated losses for FY21 were Rs 816.43 crore against a revenue of Rs 1,993.78 crore. The down-trend in losses is credited to the impacts of the Covid-19 pandemic, said the report.
9) Grey Market Trends: The unlisted shares were set at a premium of Rs 13-17 in the grey market as per the Economic Times report.
10) The Leading Book Running Managers: The issue is being managed by BofA Securities and Citigroup Global Markets. The other lead book runners are Kotak Mahindra Capital Company, Morgan Stanley India Company, Credit Suisse Securities (India) the Global Coordinators and BLRMs said the ET report.
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