The online food delivery’s app IPO opened on the 14th of July, 2021 with a price band of Rs 72-76 per share. This offer will be available for subscription till Friday, July 16, 2021. The aim of the food delivery app is to raise Rs 9,375 crore through the IPO. This includes a fresh issue of equity shares worth Rs 9,000 crore as well as an offer for sale worth Rs 375 crore by the existing investor Info Edge (India).
When the company signed the preliminary documents with SEBI early on, it had announced an IPO size of Rs 8,250 crore. In the post-pandemic world, the company is the first in opening up the company to the public from the online service providers consumer segment. The Zomato IPO will have 15 per cent reserved for non-institutional investors (NIIs) and 75 per cent reserved for qualified institutional buyers (QIBs). 10 per cent of the issue will be left available for retail investors.
As per the red herring prospectus, the fresh issue will be used in funding organic and inorganic growth initiatives of the company as well as for general corporate purposes. Prior to going public, Zomato raised over Rs 4,196 crore (Rs 41,96,51,86,380) from 186 anchor investors, that is, 55,21,73,505 equity shares at Rs 76 each. These anchor investors include Tiger Global Investment Fund, Blackrock, Fidelity, JPMorgan, Morgan Stanley, T Rowe Price, Canada Pension Plan Investment Board, Government of Singapore, SBI Mutual Fund, Axis Mutual Fund, Kotak Mutual Fund, UTI Mutual Fund, Motilal Oswal AMC, HDFC Mutual Fund, ICICI Prudential Mutual Fund, Tata Mutual Fund, Goldman Sachs India, Abu Dhabi Investment Authority, Franklin Templeton, HSBC Asset Management (India) amongst others.
The lot size for the bid is 195 equity shares. The shares are listed both on BSE and NSE and based on the upper price band, one will incur a spend of Rs 14,820 to get a single lot of Zomato. The cut-off time for UPI mandate confirmation is Monday, July 19, 2021, up to 12:00 pm.
Link Intime India is the registrar of the issue of shares and Kotak Mahindra Capital Company, Morgan Stanley India Company, Credit Suisse Securities (India), BofA Securities India and Citigroup Global Markets India are the book-running lead managers.
“Zomato, through both the fresh issue of shares and the OFS component of the issue, is likely to witness a stake dilution. However, the dilution is likely to be only around 10% to 15%, despite selling shares worth Rs. 7,875 crores to the public. This would not only help the company retain maximum control over the business operations, but also enable it to gain access to some much-needed funding.” says Motilal Oswal in an article.