Zomato IPO subscribed 38.25 times on final day, check details

• Follow

Investors pumped in Rs 2.09 lakh crore in the Rs 9,375 crore initial public offering of Zomato as the issue got subscribed over 38.25 times on the last day of the bidding process. The public offer received bids for over 2,751.25 crore equity shares against an IPO size of 71.92 crore, stock exchange data showed. The portion reserved for qualified institutional investors was subscribed over 51.79 times so far, while the quota reserved for retail investors got subscribed by over 7.45 times. Non-institutional investors put in bids for 640.56 crore shares against their reserved quota of 19.43 crore. The portion set aside for employees has been subscribed 62%.

Analysts hold a mixed view on loss-making food ordering platform Zomato whose Rs 9,375 crore IPO opened for subscription on July 14. The company is aiming to raise Rs 9,375 crore through an initial share sale which will conclude on July 19. The price band for the issue has been fixed at Rs 72-76 per share.

What’s on offer?

The total IPO size comprises a fresh issue of equity shares worth Rs 9,000 crore and an offer-for-sale to the tune of Rs 375 crore by Info Edge (India) Ltd. Market watchers believe that Zomato has sacrificed operating profitability to achieve faster growth and has been reporting losses.

For the financial year ended March 31, the company has managed to reduce its losses by over 66% as its annual loss dropped from Rs 2,385.6 crore in FY20 to Rs 816.4 crore in FY21. The company posted a loss of Rs 1,010.51 crore in FY19. On the other hand, the revenue of the company increased to Rs 1,993.80 crore in FY21 from Rs 1,312.58 crore in FY19. The figure stood at Rs 2,604.70 crore in FY20.

Grey market chatter

At the closure of the issue, the shares were quoting at Rs 93 per share commanding a premium of Rs 17 or 22%. “Despite the bulky size of  IPO, concerns on profitability and valuations, the IPO got decent subscription as the excitement for a tech startup flourishing in the market,” said Abhay Doshi,  Founder of Unlisted Arena.