Young investors drove demand for Zomato IPO on Paytm Money on day one
A study of investors who completed the Zomato IPO application on Paytm Money showed that young first-time investors are driving demand for capital market instruments.
A Paytm Money study on the much-awaited Zomato IPO outlined some interesting shifts in investing trends, such as a lot more youngsters applied to buy the food delivery giant's shares versus older retail investors.
A whopping 27 percent of those who applied for Zomato's IPO on Paytm Money on day one were under the age of 25, the study showed, while 60 percent were under 30 years of age.
In fact, the average investor in Zomato's IPO was a year younger than applicants Paytm Money has seen for other IPOs on its platform, the Noida-based firm said.
Zomato has generated strong interest not only from anchor investors but also retail investors. Its retail portion was subscribed by over 200 percent within the first couple of hours of opening on July 14.
22 percent of the people who applied for Zomato's IPO on Paytm Money were new-to-industry investors
Even the average investment in Zomato's initial public offering was 20 percent higher than the average investment in any other IPO on Paytm Money, it said.
Dalal street analysts, while they're not too excited about Zomato's fundamentals, recommended investors 'subscribe' or 'subscribe for listing gains' for the food delivery company's Rs 9,375 crore IPO, YourStory had reported.
"Zomato has been able to reduce its losses in FY21 despite degrowth in topline (due to COVID-19). We expect losses to reduce further over the next couple of years due to rebound in growth and improving unit economics," predicts Angel Broking equity strategist Jyoti Roy.
"Given the strong delivery network, high barriers to entry, expected turnaround, and significant growth opportunities in Tier-II and III cities, we believe Zomato will command a premium to global peers and hence have a ‘subscribe’ recommendation on the IPO," Jyoti adds.
60 percent of the people who subscribed to Zomato's IPO were under 30 years of age
Paytm Money, just ahead of Zomato's IPO, started allowing users to place their orders even before the subscription opened with its 'Pre-open IPO application' feature, which saw a lot of takers, especially in light of the food delivery company's placement.
Nearly 22 percent of those who applied for Zomato's IPO on Paytm Money were new-to-industry investors, a study conducted by the fintech giant's online investing arm showed.
Paytm Money's study also revealed that other than participation from investors in top-tier cities like Delhi, Bengaluru, and Mumbai, the app saw a lot of first-time participation from smaller towns too, like Kodinar in Gujarat, Tuensang in Nagaland, and Rangapara in Assam.
Under 25-year-olds participated in Zomato's IPO
Of the total subscribers on day one, 10 percent were women with a marginally higher ticket size versus men.
Zomato’s Rs 9,375 crore IPO comprises Rs 9,000 crore worth of fresh issue of equity shares and Rs 375 crore of a secondary share sale by InfoEdge. The company is eyeing a post-issue valuation of Rs 64,365 crore.
Its anchor investors included New World Fund (3.91 percent), Tiger Global (3.87 percent), Morgan Stanley Asia (Singapore) Pte (3.43 percent), Canada Pension Plan Investment Board (2.99 percent), Baillie Gifford Pacific Fund (2.99 percent), Morgan Stanley Investment Funds Asia Opportunity Fund (2.74 percent), Fidelity Funds India Focus Fund (2.54 percent), Government of Singapore (2.30 percent), and Kotak Flexicap Fund (2.17 percent).
Edited by Suman Singh