According to a filing to local stock exchanges, Zomato revealed that it plans to raise a total of $1.3 billion through the IPO and has achieved 45% of that figure with its latest funds.
Zomato, an Indian food-delivery startup announced on July 13 that it has raised $562.3 million from its anchor investors ahead of its planned Initial Public Offering (IPO) opening on July 14. The much-anticipated IPO will be opened for subscription in the early stages of July 14 and will close on July 16.
According to a filing to local stock exchanges, Zomato revealed that it plans to raise a total of $1.3 billion through the IPO and has achieved 45% of that figure with its latest funds. The food-delivery startup is backed by Jack Ma‘s Ant Group and is the first of India’s major digital start-ups to go public via an IPO, as more are expected.
The three-day offering, with shares priced between 72 to 76 rupees ($0.97 -$1.02 per share), is expected to take the company’s valuation to $9bn up from its $5.4 billion in February this year. According to reports, demand from retail investors had been off the roof within weeks leading to the IPO subscription. Investors had subscribed to almost 29% of the offered shares at noon local time on July 14, with trading in the stock likely to begin on July 27, according to stock exchange data.
Zomato had already allotted shares worth $562.3m to about 200 foreign and domestic investors before Wednesday’s opening. Government of Singapore, Fidelity Canada Pension Plan, State Bank of India, private equity firms Tiger Global and BlackRock, Mirae Asset, New World, T. Rowe Price, Baillie Gifford Steadview, and some of the country’s biggest banks including Kotak, ICICI, and HDFC, are all among investors backing the company public.
Market experts believe the oversubscription shows the confidence high-profile investors are placing in the world’s second-largest internet market’s first real consumer internet offering. Zomato after its listing will reportedly rank amongst the top 80 companies in India by market capitalization overtaking some known and established brands in the country including Aurobindo Pharma, Hero MotoCorp, Piramal Enterprises, Lupin, Apollo Hospitals, SAIL, and Bandhan Bank.
Executives of Zomato in a virtual press conference last week, stated that the startup, “which has searched and scorched in almost two dozen markets,” will now shift its focus on India and will explore all trading options such as online grocery delivery in the future. Zomato executives also dismissed e-commerce giant Amazon as a serious competitor for now.
The startup’s chief financial officer speaking on that said “There’s no major impact on market share from Amazon so far.” The company’s revenue was down 23% to $283 million for the financial year that ended in March this year. Zomato also narrowed its losses to $110 million, down 66% from the same period one year ago.
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