The much-awaited initial public offer (IPO) of online food delivery and restaurant discovery platform Zomato is expected to open for subscription on July 19 at a price band of Rs 70-72 per share, said people with direct knowledge of the development.
The offer size will likely be as much as Rs 9,375 crore at this price, making it the second-biggest IPO in the last four years after the Rs 10,355 crore offer from SBI Cards and Payment Services. In October 2017, General Insurance Corporation of India raised Rs 11,176 crore through an IPO.
At the upper end of the price band, the company will be valued at $7.6 billion (Rs 56,240 crore), more than Amazon-backed British food delivery firm Deliveroo or Nasdaq-listed Grubhub. The latter two currently trade at a market capitalisation of $7.4 billion and $5.5 billion, respectively.
The initial public offer (IPO) comprises fresh issue of equity shares worth Rs 7,500 crore and an offer-for-sale to the tune of Rs 750 crore by Info Edge (India) Ltd, according to draft red herring prospectus. Zomato, which filed preliminary IPO papers with Sebi in April, obtained its observation on July 2, an update with the regulator showed on Monday.
Sebi’s observation is very necessary for any company to launch public issues like IPO, follow on public offer (FPO) and rights issue.
Going by the draft papers, proceeds from the fresh issue would be used towards funding organic and inorganic growth initiatives; and general corporate purposes.
The online food delivery segment has seen significant growth in the last few years with Zomato and Swiggy competing head-on to grab market share.
Kotak Mahindra Capital Company, Morgan Stanley India Company Pvt Ltd and Credit Suisse Securities (India) Pvt Ltd are the global coordinators and book running lead managers to the issue.
BofA Securities India Ltd and Citigroup Global Markets India Pvt Ltd have been appointed as merchant bankers to the public issue. The shares of the company will be listed on BSE and NSE.
Last year, Zomato founder and CEO Deepinder Goyal had told employees that the company was planning to go for an IPO in the first half of 2021.