BENGALURU: Zomato will make its debut on Indian stock exchanges on July 14 and has increased the size of its Initial Public Offering to Rs 9,375 crore from earlier proposed Rs 7,500 crore , making it the first consumer internet company of India to go public.
According to the Red Herring Prospectus filed with the Registrar of Companies under the Ministry for Corporate Affairs, Zomato has proposed to open its bid offer for institutional/ retail investors on stock exchanges from July 14-16, earlier than the proposed dates, signalling a peaked interest from the market.
The food tech firm is also looking to raise over$ 1 billion (Rs 7,031 crore) from large institutional buyers. Sources say that Zomato’s IPO valuation may even surpass $ 8.7 billion (Rs 65,000 crore) , after it has received interests from Foreign Institutional Investors (FIIs).
This also includes an offer for sale by its biggest existing investor Infoedge for equity shares aggregating to Rs 375 crore. Zomato has also allocated 6,500,000 equity shares for purchases by the company’s employees , which will be included in the offer, as per the company filing.
The documents also suggest a huge traction for the food delivery giant by the large institutional investors with at least 75% of the share allocation to the qualified institutional buyers (QIBs), out of which 60% will be reserved for the anchor investors, in accordance with SEBI’s issue of capital and disclosure requirements regulations. Under the SEBI norms, anchor investors are those QIBs who agree to invest a minimum of Rs 10 crore in the IPo before it opens. Zomato also said that not more than 10% of the offer allocation will be made towards individual retail investors.
Despite improving its unit economics (average revenue per order) by increasing the delivery charges and charging higher commissions from partner restaurants, the food delivery startup is still not EBITDA positive, and will also test the street sentiments for new-age companies with huge stakes from the foreign VC funds. The company has also recently rejigged its board and has appointed 5 independent directors including four women.