Zomato IPO may hit the market on July 19, says report

The initial public offer (IPO) of foodtech unicorn Zomato is likely to open for subscription on July 19 at a price band of Rs 70-72 per share, according to a report.

A report in The Economic Times said Zomato's IPO is mostly likely to be open from July 19 to 22. The IPO size could also go up to Rs 9,375 crore with Rs 9,000 crore being fresh equity and shares worth Rs 375 crore from the company’s largest shareholder, InfoEdge.

Meanwhile, the Securities and Exchange Board of India (SEBI) has given Zomato the go-ahead to raise Rs 8,250 crore through an initial share sale.

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The IPO comprises a fresh 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, according to the draft red herring prospectus.

Zomato, which filed preliminary IPO papers with Sebi in April, obtained its observation on July 2, an update with the regulator showed on Monday.

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.

The online food delivery segment has seen significant growth in the last few years with Zomato and Swiggy competing head-on to grab market share.

Zomato's 2019-20 revenue had jumped over two-fold to $394 million (around Rs 2,960 crore) from the previous fiscal year, while its Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) loss was around Rs 2,200 crore.

In February, Zomato had raised $250 million (over Rs 1,800 crore) in funding 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.

BofA Securities India Ltd and Citigroup Global Markets India Pvt Ltd have been appointed as merchant bankers to the public issue. The shares the company will be listed on BSE and NSE.

Last year, Zomato founder and CEO Deepinder Goyal had told employees that the company was planning to go for an IPO in the first half of 2021.