Investors continue to make bids for shares of Zomato on day 2 of the company’s initial public offering. As of 5pm on July 15 2021, the issue has been subscribed 4.79 times, receiving bids for 3,45,13,40,880 shares. Backed by Ant Group, Zomato is the first online food aggregator in India. Moreover, it is the first out of the many unicorn start-ups in the country to go public. The IPO will give Zomato a valuation of approximately Rs. 64,365 crores.
India’s leading food delivery platform aims to raise approximately Rs. 9000 crores via fresh issue. It also intends on raising funds worth Rs. 375 crores through a secondary issue by Info Edge.
On day 1 of Zomato’s much-awaited initial public offering, investors put in bids for 75.60 crore equity shares. As announced, the IPO size was 71.92 crore. As a result, it was oversubscribed 2.7 times on day 1.
IPO subscription status: Day 1
Here’s what the subscription status looked like on day 1 across different investor categories:
- By 5 pm on Wednesday, retail investors put in bids for 34.8 crore shares against 12.9 crore shares that were reserved for them. Accordingly, this category was subscribed 269% or 2.69 times.
- Non-institutional buyers sought 13% against the portion allotted for them. Nevertheless, the Qualified Institutional Buyers (QIBs) category was subscribed 98 times. Bids were put in for almost all of the 38.88 crore shares reserved for them. That said, out of the 38.09 shares that QIBs subscribed, 36.84 crore of them includes foreign institutional investors (FIIs).
- The portion of the IPO that the issuer allotted for employees was subscribed by 18%.
Zomato IPO status: Day 2
Given below is the subscription status across various investor categories on the second day of bidding:
- Retail investors subscribed 4.73 times the portion allotted for them.
- Qualified Institutional buyers put in bids for more than 7 times the shares reserved for them.
- HNI individuals sought 45% of the allotted portion; whereas, the employee category was subscribed 36%.
Market observers believe that bulk of the subscriptions will come on Friday.
Zomato already raised funds worth approximately Rs. 4196.51 crore from 186 anchor investors a day before its issue opened. The company had reserved 55.22 crore equity shares at Rs. 76 each for anchor investors.
However, bids were put in for 30 to 35 times the allotted portion. Accordingly, the issue size dropped to approximately Rs. 5,178 crores from Rs. 9,375 crores.
Here are some of the top anchor investors:
- Fidelity Fund
- Kotak Flexi Cap Fund
- Government of Singapore
- Morgan Stanley Investment Fund
- New World Fund
Accordingly, market observers are viewing this as the second-biggest IPO since March 2020. The company’s IPO will outdo Indian Railway Finance Corporation’s Offering in January this year.
Zomato will utilise funds worth Rs. 6750 crores from the fresh issue to finance organic as well as inorganic growth objectives. Moreover, it will utilise the amount to achieve general corporate objectives.
As of now, the Zomato IPO has received bids for approximately 3.45 billion shares worth Rs.26,000 crore.
The final word
Investors must note that they won’t be just paying a premium for this company’s long-term growth prospects. After all, Zomato has the potential to explore different avenues to fulfil the requirements of consumers.
In that regard, their delivery model concerning groceries is a crucial indicator that one must consider. The biggest IPO of this year will continue to be open for subscription till Friday with a price band of Rs. 72 to Rs. 76.
Frequently Asked Questions
- What is Zomato IPO?
The IPO of India’s first online food aggregator has an issue size of approximately Rs. 9,375 crores. It includes fresh issue worth Rs. 9,000 crores. Also, there will be an offer for sale encompassing Rs. 375 crores by Info Edge, the largest stakeholder of the company.
- From where can investors get the allotment status of Zomato IPO?
Investors can check the Zomato IPO allotment status by vising the official portal of Link Intime India.
- What is the lot size of Zomato IPO?
The lot size of Zomato IPO is 195 shares. That said, individuals must note that they can bid for up to 13 lots.