08 Jul , 2021 By : Kanchan Joshi
MUMBAI: Zomato Ltd has set the offer price for its initial public offering at Rs72-76 a share. Earlier, the firm said that its issue will open for subscription on 14 July and close on 16 July.
The issue comprises a fresh issue of Rs375 crore and an offer for sale of Rs9,000 crore by its current promoter Info Edge India Ltd. Employee reservations were kept at 6.5 million shares.
“It is a watershed moment for the Indian markets—Zomato becomes the first major startup to get listed which will pave the way for many other such listings. Zomato is a technology enabled food aggregator platform that connects customers, restaurant partners, and delivery partners, serving their multiple needs", said Aditya Kondawar, COO, JST Investments
The number of orders on their platform has increased from 3.06 cr in FY18 to 40.31 cr in FY20 and 15.52 Cr in FY21. The average order value has increased from Rs279 in FY20 to Rs398 in 9MFY21 and the discounts have also reduced per order from Rs21.7 to Rs7.3 in 9MFY21.
Zomato has seen a rapid rise in revenue across business verticals over the past few months. It clocked Rs1,367 crore in revenues for the first three quarters of FY21. The food-tech company’s expenses were about Rs1,724 crore, which resulted in a loss of Rs684 crore.
As of 31 December, Zomato had 3,50,174 active restaurant listings. In terms of table bookings, 12.2 million covers were booked through its platform in fiscal 2020. On an average, in fiscal 2020, Zomato had 131,233 active food delivery restaurants every month.
“The numbers are working in Zomato’s favour as the AOV has increased, discounts have decreased and per unit economics are looking good in 9MFY21.However the metrics improvement is thanks to the delivery sector becoming a necessity from a luxury. At the same time, NRAI has stepped up the pressure against aggregators by announcing their own app, emergence of new age aggregators such as Thrive, Peppo , DotPe, etc and Amazon also doing food delivery in Bangalore. The business is a cash guzzling one", Kondawar adds
Zomato is eyeing an increase in valuation for its upcoming IPO from around $8 billion to up to $10 billion against the backdrop of a rapid increase in online food-ordering, restaurant-bookings, and subscriptions for Zomato Pro businesses, which in turn has caused a significant increase in demand from potential investors for Zomato’s shares.
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