Zomato IPO: Indian food delivery start-up raises $ 1.3 billion in massive public offering in Mumbai

Food delivery start-up Zomato is seeking to raise nearly $ 1.3 billion this week in an initial public offering in Mumbai, the company said in a statement. recent regulatory filing. That would set a new record for the largest tech offering in India, according to data from Refinitiv, beating Tata Consultancy Services’ IPO by $ 1.17 billion in 2004.

Zomato plans to sell shares at a price of between 72 and 76 rupees (97 cents to $ 1.02) per share and to close its books on Friday. At the high end of the price bracket, Zomato is said to be valued at nearly $ 8 billion.

Its founder Deepinder Goyal began on Wednesday with a nervous tweet: “Just ordered a triple @zomato breakfast. Eating stressed out.”

Investors are watching the supply closely, which will give some insight into the market appetite for Indian startups. The country has a ton of technology unicorns – companies that have reached a valuation of at least $ 1 billion – but none of them have ever been made public before.

Analysts have expressed concern that Indian startups, many of which raised hundreds of millions of dollars private markets at extremely high valuations – must start showing consistent earnings and healthy exits for investors.

“This IPO is in a way the beginning of the promises of the Indian digital ecosystem which are starting to be realized”, Ashish Fafadia, partner at Indian venture capital firm Blume Ventures, told CNN Business.

He said investors will review the performance of the company after its listing, as well as Zomato’s ability to meet its quarterly targets.

“The ultimate long-term test would be whether they are capable of becoming a profitable business,” he added.

Opening the way

Zomato was founded in New Delhi in 2008 by Goyal. The company has made a name for itself as one of India’s most successful startups, with a team of more than 5,000 employees and a reach in more than 10,000 cities in two dozen countries, from Sri Lanka and from Slovakia to South Africa.

The firm made waves in January 2020 when it bought Uber Eats in India, giving Zomato a big victory in its home market. Based in california Uber (UBER) took an almost 10% stake in Zomato as part of the deal.

Zomato’s public offering this month could also pave the way for more Indian unicorns.

Walmart-owned Flipkart, which is the only Indian tech unicorn to be acquired at a valuation of over $ 1 billion, is considering a public offering, according to the media.
This e-commerce company raised $ 3.6 billion in its latest round of funding from investors, including GIC, the Canada Pension Plan Investment Board, SoftBank’s Vision 2 Fund and Walmart (WMT), the company said this week. Flipkart is now valued at almost $ 38 billion.

by Zomato The IPO will also serve as an additional test for the closely watched global food delivery industry. Deliveroo’s IPO crashed in London earlier this year despite much fanfare, becoming the city’s worst debut ever.

– Michelle Toh contributed to this report.

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