On July 19, Zomato will finally open up subscriptions for its initial public offering. The price range will be Rs 70-72 per share. Find out everything you need to know in this article!
Zomato To Finally Launch IPO; Subscription Open from July 19
Reports have confirmed that Zomato’s IPO will most probably be open to subscription on July 19 and will Continue till July 22. The subscription for the IPO will open from July 19 to 22. There are reports that state that the size of the IPO would now be increased to Rs. 9375 crores. Of this, Rs 9,000 crore will be fresh equity and shares worth Rs 375 crore from InfoEdge, which is the company’s largest shareholder.
The Securities and Exchange Board of India, SEBU has also given its permission to Zomato to raise Rs. 8250 crore through an initial share sale.
It was revealed in the draft red herring prospectus that this IPO will include a new 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.
As we reported earlier, Zomato, India’s top online food delivery platform is gearing up for a huge IPO (initial public offering) with the Securities Exchange Board of India (SEBI).
Zomato Plans To Raise Rs. 8250 Crores As Business Takes Off
The food delivery aggregator plans to raise Rs 8,250 crore this year as the cases continue to grow and Zomato’s business is booming. The draft red herring prospectus (DRHP) with the market regulator confirms Zomato is aiming to raise Rs 8,250 crore in capital by offering the company’s equity shares for sale.
Zomato had submitted preliminary IPO papers with SEBI in April 2021 and received its observation on July 2, as confirmed by an update from the regulator.
As suggested by the draft papers, the proceeds from the fresh funding will be used for the funding of organic and inorganic growth initiatives; and general corporate purposes.
As we all know, the observation of SEBI is crucial for a company who is launching public issues like IPO, follow on public offer (FPO) and rights issue.
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.
Online food delivery has seen significant growth over the last few years, with Zomato and Swiggy competing for market share.
Revenues at Zomato in 2019-20 surged two-fold to $394 million (roughly Rs 2,960 crore), as earnings before interest, taxes, depreciation, and amortization (EBITDA) lost Rs 2,200 crore in the same period.
Zomato raised $250 million (over Rs 1,800 crore) in funding in February from Tiger Global, Kora, and others, valuing the online food ordering platform at $5.4 billion.
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.
Citigroup Global Markets India Pvt Ltd and Bank of America Securities India Ltd have been appointed as merchant bankers to the public offering. The shares the Zomato will be available on BSE and NSE.
Deepinder Goyal, Zomato’s founder and CEO, told employees last year that the company plans to go public in the first half of 2021.