Food delivery company Zomato is set to launch its three-day initial public offering (IPO) on July 14. With this, the company will become the first online food aggregator startup to list on the national stock exchanges.
As per initial plans, the Gurugram-headquartered company is looking to raise as much as Rs 9,375 crore by issuing fresh stock and via an offer for sale at Rs 72-76 per share. Zomato is likely to be valued at nearly $9 billion at the upper end of this price band.
According to the company, the proceeds via IPS will be used for organic and inorganic growth initiatives and general corporate purposes. While 75% of the Zomato IPO will be reserved for qualified institutional buyers, non-institutional investors can bid for up to 15% shares on offer. Retail investors have 10% of the stock allotted to them. Employees have access to up to 6.5 million shares.
Kotak Mahindra Bank, Morgan Stanley India and Credit Suisse Securities are global coordinators and book-running lead managers to the offering. BofA Securities and Citigroup Global Markets are book-running lead managers. The shares will list on the BSE and the National Stock Exchange before the end of this month.
As per details, the Zomato IPO will be announced via video conference on July 8. According to the RHP, revenue fell 23.4% year-on-year to Rs 1,994 crore in the year ended March 31, 2021. The company loss, however, narrowed from Rs 2,363 crore in FY20 to Rs 812 crore in FY21.
“We (Zomato) may not be able to sustain our historical growth rates, and our historical performance may not be indicative of our future growth or financial results,” Zomato said in the prospectus. “We have a history of net losses and we anticipate increased expenses in the future.”
Meanwhile, Zomato said it connects customers, restaurants and delivery partners-serving their multiple needs. Customers use the platform to search/discover restaurants, read/write reviews, upload photos, order food, book tables and make payments while dining out. Restaurant partners get marketing tools to acquire customers, while delivery partners earn by making deliveries.
“We generate a majority of our revenue from food delivery and related commissions charged to our restaurant partners for using the platform,” it said.