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Zomato to join India’s 100 most-valued club
At ₹76 per share, the upper end of the price band of ₹72-76 announced on Thursday by Zomato, the country’s largest food delivery platform will have a post-money valuation of ₹59,623 crore.
Zomato Ltd’s much-awaited initial share sale could propel the 13-year-old food delivery firm into the ranks of India’s 80 most valuable companies.
At ₹76 per share, the upper end of the price band of ₹72-76 announced on Thursday by Zomato, the country’s largest food delivery platform will have a post-money valuation of ₹59,623 crore, giving it the 78th position among listed firms in India by market value. The share sale will open for subscription on July 14.
Zomato’s valuation will outrank long-established and well-known names such as Hero MotoCorp Ltd, India’s biggest two-wheeler maker; drugmaker Aurobindo Pharma; Piramal Enterprises; Apollo Hospitals, Biocon Ltd and Bandhan Bank.
The issue, which closes on 16 July 16, comprises an offer for sale of ₹375 crore by the company’s early investor—Info Edge—and a fresh issue worth ₹9,000 crore. The stock is likely to list on July 27.
“Proceeds will be used for organic growth, including customer acquisition, growing the delivery infrastructure and technology platform. The second is for inorganic initiatives, which will include minority share purchases or full buyouts. And the third bucket is general corporate purposes, where we will be investing up to 25% of the proceeds,” said Akshant Goyal, chief financial officer, Zomato.
Post the IPO, Zomato will have about $2 billion, or roughly ₹15,000 crore in cash in the bank, he added. While Zomato saw a 23.5% drop in revenue from operations to ₹1,993.7 crore in FY21 on account of lockdowns, the firm said its order volumes have recovered. “In Q4, we have seen the highest gross order volume ever for our food delivery business. We are healthy from an economic standpoint,” said Goyal.
Gaurav Gupta, co-founder, Zomato, said the firm hasn’t seen an impact on order volumes due to most states lifting Covid restrictions and restaurants opening up. “Our experience says once a consumer orders 2-3 times from a restaurant, it becomes a habit. And another thing is that for our tier-II, -III and -IV markets, we have been pleasantly surprised at the uptick. Consumers have accepted food delivery. And we believe there is still a large market of consumers who haven’t ordered from food delivery apps yet,” Gupta said.
