Zomato IPO opens tomorrow. Here's what you need to know

Zomato has said it will utilise the net proceeds from the fresh issue for funding organic and inorganic growth initiatives and general corporate purposes.

Zomato will launch its three-day initial public offering or IPO on Wednesday, July 14. Zomato IPO will be India's biggest this year and the company aims to raise ₹9,375 crore through the offer at ₹72-76 per share price band. Zomato's maiden offer will comprise a fresh issue of ₹9,000 crore and the sale of shares worth ₹375 crore by existing investors, according to its red herring prospectus.

Zomato, which is backed by Jack Ma's Ant Group Co, will be among the first from a long list of Indian unicorn startups to launch an IPO. (File Photo)

The Zomato IPO comprises a fresh issue of equity shares worth ₹9,000 crore and an offer-for-sale (OFS) worth ₹375 crore by existing investor Info Edge (India), the parent company of Naukri.com, according to the draft red herring prospectus. The Zomato IPO will have 75 per cent reservation for qualified institutional buyers (QIBs), 15 per cent for non-institutional investors (NIIs) and 10 per cent of the issue will be available for retail investors.

Zomato has said it will utilise the net proceeds from the fresh issue for funding organic and inorganic growth initiatives and general corporate purposes.

Zomato, which is backed by Jack Ma's Ant Group Co, will be among the first from a long list of Indian unicorn startups to launch an IPO. It will also be the first among Indian online food aggregators. The IPO will give Zomato a valuation of ₹64,365 crore and is being touted as the second-biggest since SBI Cards and Payment Services' ₹10,341 crore issue in March 2020. It will surpass Indian Railway Finance Corp offering in January.

After the IPO, Zomato's valuation will be more than the combined market capitalisation of five listed fast food and restaurant companies.

Zomato's 2019-20 revenue jumped over two-fold to around ₹2,960 crore from the previous fiscal year and its earnings before interest, taxes, depreciation and amortisation (EBITDA) loss was around ₹2,200 crore.

Zomato raised $250 million or over ₹1,800 crore in February in funding from Tiger Global, Kora and others, valuing the online food ordering platform at $5.4 billion or around ₹40,000 crore.

Zomato filed preliminary papers with the Securities and Exchange Board of India (Sebi) in April and got the market regulator's nod last week to float the IPO. Shares of Zomato will be listed on both BSE and NSE.

(With agency inputs)