By 11 am, the issue had attracted bids for 78,99,94,530 shares, 1.1 times of the issue size of 71,92,33,522 shares.
“Zomato has a robust operating model and a strong market penetration, making it one of the leading food service platforms in India. It’s mobile application is the most downloaded application in India, in each of the last three fiscal years. We believe a better service mix and a robust operating model will accelerate the revenue growth momentum,” said Naveen Kulkarni, Chief Investment Officer, Axis Securities.
“With growth expected to pick up in the forthcoming years after a pandemic, and the rising use of online platform, we expect the company to breakeven at operating levels in FY22, making the IPO more lucrative.”
The issue comprises fresh issuance of shares, aggregating up to Rs 9,000 crore, and an offer for sale of up to Rs 375 crore by
. It is being sold in the Rs 72-76 price band.
Investors can subscribe to the initial public offering (IPO) by betting for a lot of 195 shares or in multiples thereof. Retail investors can bid for a maximum of 13 lots at the upper price band. The quota for retail investors in Zomato IPO is fixed at 10 per cent of the net offer. QIB quota is fixed at 75 per cent while for NIIs the quota is reserved at 15 per cent.
At the higher end of the Rs 72-76 price band, Zomato IPO is demanding a trailing 12-month price-to-sales of 29.9 times, which is at a premium over the global peer average, analysts said.
The valuation also appears expensive when seen from 25 times FY21 EV/sales basis as global peers trade at an average EV/sales of 9.6 times and domestic QSRs at 11.6 times.
Fundraising deals in the food delivery industry over the last 2-3 years also suggests Zomato, at a $9 billion valuation, is richly valued.
