Online meals delivery platform Zomato is searching to raise a huge Rs 8,250 crore by way of its substantially-awaited initial public supplying (IPO). In its DRHP, filed with the capital markets regulator Securities and Exchange Board of India (SEBI) today, Zomato mentioned its IPO will be an amalgamation of fresh situation of equity shares and an Offer For Sale (OFS) by current shareholder Info Edge Ltd — the parent firm of Naukri.com. With this, Zomato has begun the proceedings of one of the most awaited public troubles on Dalal Street in current years. Zomato’s IPO could be the biggest to hit Dalal Street given that SBI Cards and Payment Services in March 2020.
Issue information
Zomato will raise Rs 8,250 crore, of which Rs 7,500 crore will be a fresh situation, although a different Rs 750 crore will be an OFS by Info Edge. On Tuesday evening, Info Edge, which holds more than 18% stake in Zomato informed the bourses that its Board of Directors has provided approval to participate in the OFS of Zomato. Zomato has also mentioned that it could look at a private placement of Rs 1,500 crore ahead of the IPO. Such a move is probably to trim the size of the fresh situation that the organization has so far proposed.
Zomato mentioned it will utilise funds raised by way of the situation for organic as effectively as inorganic development, along with basic corporate purposes. In the monetary year ending March 2020, Zomato’s total earnings stood at Rs 2,742 crore. Meanwhile in the pandemic struck 2020, the company’s earnings was at Rs 1,367 crore. Zomato continues to stay a loss-generating entity as of now.
Valued at $5.4 billion
Zomato, an on the net meals delivery organization, counts Ant Financials, Info Edge, Sequoia, and Uber as some of its investors. The organization has strengthened its position in the two-player meals delivery industry with the most up-to-date round of funding coming in February this year. Zomato received $250 million in its most up-to-date investment round at a post-income valuation of $5.4 billion, Info Edge had mentioned in an exchange filing. In the most up-to-date rounds of fundraising, Tiger Global, Fidelity, and Kora Management had been amongst these writing cheques for the organization.
“Food services is a large market in India with ~$80 Bn (~50% organized). Online food delivery is expected to grow strongly to reach $22 billion by 2025 growing at 40% CAGR. Online penetration to increase from 7% today to ~10% in 2022 and ~ 20% by 2025,” Bernstein had mentioned in a report last year. Zomato controls a 50% industry share.
In a current report, CLSA mentioned that Swiggy and Zomato are fighting for India’s $11 billion on the net meals delivery pie. Profitability is now taking the center stage in the business as each Zomato and Swiggy attempt to strengthen their unit economics. CLSA believes earnings will expand as volumes enhance.