Zomato’s Strong Debuts on D-Street with Nearly 66% Gains on the First Day

By Angel One | Published on 27th July 2021 | 41

Zomato’s Strong Debuts on D-Street with Nearly 66% Gains on the First Day

India’s leading online food delivery and restaurant discovery platform, Zomato, raised the third-highest amount in the Indian stock market’s history.

The Zomato IPO received a strong response from investors across various categories. At the last bidding day’s end, Zomato’s public issue was subscribed more than 38 times. This eagerly-awaited initial public offering is the largest one in D-street since the public issue of SBI Cards and Payment Services, worth Rs. 10341 crores.

Zomato shares got listed earlier than the previously scheduled date due to improved primary and broader market sentiments.

Zomato Listed on the Bourses: Yay or Nay?

Here are some highlights of Zomato IPO share listing:

  • On 23 July, Zomato shares got listed on the BSE at Rs. 115 per unit. This represented a 51.3% premium concerning the public issue’s upper price band of Rs. 76 per share.
  • After Zomato’s stock made its debut on the bourses, it nearly doubled investors’ money, hitting 20% upper circuit at Rs. 138.
  • On the NSE, the closing price of Zomato shares was Rs. 126 per unit, which is 66% or Rs. 50 more than its issue price. The online food aggregator’s market capitalisation dropped from an intraday high of Rs. 1 lakh crores to Rs. 98,211 crores at the closing bell.
  • On the BSE, Zomato stock closed at Rs. 125.85 apiece, i.e., Rs.49.86 or 65% higher than the upper price band.
  • With regard to traded volumes, 451 lakh shares were bought and sold on the BSE. Whereas 69.48 crores Zomato shares changed hands on the NSE on the first day of trading.

On the second day, shares of Zomato have continued to extend gains. At the time of writing, Zomato stock trades at Rs. 129.30 on the NSE, 2.5% higher than the previous closing price.

For investors looking to invest in shares of India’s leading online food aggregator, it’s vital to consider certain aspects like competitive strengths and financials. So, let’s look at some of the essential information regarding Zomato.

Key Details – Zomato

Some crucial details regarding Zomato that interested investors might want to consider are:

  • Incorporated in 2010, Zomato features an online platform that links consumers with restaurants and delivery partners.
  • Zomato has an asset-less business model, providing the company with high financial leverage.
  • The company’s prudent online and offline marketing strategies have been instrumental to expanding its customer base.
  • Zomato’s digital platform features an intuitive UI. It lets users from different educational and financial backgrounds to navigate it conveniently.
  • Zomato cut back losses from Rs. 2367 crores in FY20 to Rs. 812 crores in FY21. Its expenses also dipped by nearly Rs. 2400 crores. However, Zomato’s revenue lowered to Rs. 2604 crores in FY20 to Rs. 1994 crores in FY21.

Final Word

Zomato made an impressive debut on D-street as the market capitalisation crossed the Rs. 1 lakh crores mark. From the standpoint of demand supply, one can expect the stock price of Zomato to rise going forward as well.

Moreover, the industry’s long-term outlook appears to be positive. However, investors must note that this company is not yet profitable. That said, there’s a possibility of the margins improving soon owing to shifting consumer tendencies.

 

Frequently Asked Questions

  1. Who are some of the investors of Zomato?

Zomato’s list of investors includes Info Edge, Alipay Singapore Holding Pte Ltd, Antfin Singapore Holding Pte Ltd, Sequoia Capital, Temasek Holdings subsidiary, and Deepinder Goyal (co-founder), besides others.

  1. How many restaurant listings does Zomato have?

Zomato has nearly 390,000 restaurant listings and operates across 500 cities.

  1. In how many countries does Zomato operate?

Zomato conducts operations in 23 countries worldwide, including Australia, Canada, and the USA.

  1. When did Zomato get its latest funding?

Zomato obtained its latest funding worth $250 million on 22 February 2021.

  1. How many times was the Zomato IPO retail individual investor section subscribed?

At the end of the last bidding day, the retail individual investors (RII) section was subscribed 7.45 times.

  1. What will Zomato do with the net proceeds of the IPO?

Zomato will utilise the funds raised via its IPO to fulfil both inorganic and organic growth requirements besides meeting general corporate purposes.