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Zomato looks to raise valuation to $7-9 billion via IPO

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Zomato looks to raise valuation to $7-9 billion via IPO

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Food delivery giant Zomato has filed a DRHP with the market regulator Sebi to raise over a billion dollars. Sources with direct knowledge have told CNBC-TV18 that the company is eyeing a valuation of over 7 billion dollars and up to 9 billion dollars from the equity issuance via the IPO.

Food delivery giant Zomato has filed a DRHP with the market regulator Sebi to raise over a billion dollars. Sources with direct knowledge have told CNBC-TV18 that the company is eyeing a valuation of over 7 billion dollars and up to 9 billion dollars from the equity issuance via the IPO.

A large range of valuation expectation is reflective of the uncertainty due to the second wave of COVID-19 and a lot will depend upon the investor response during the roadshows in the absence of a direct peer comparison in the Indian market.
Even at the lower end of the $7-9 billion expectation, it is substantially higher than the recent fundraising round which gave it a value of $5.4 billion.
Out of the total IPO issuance of Rs 8250 crore, the fresh equity issuance is worth Rs 7500 crore and the offer for sale of Rs 750 crore by Infoedge which owns 18.4 percent stake in Zomato.
Infoedge will directly benefit from any uptick in the valuation of Zomato. Sources familiar with the developments at Zomato suggest that the company is looking at launching the IPO by the middle of 2021.
Zomato is one of India's most prominent startups and was launched in 2008. It is present in 24 countries and employs more than 5,000 people, according to its website.
In February, the company had raised $250 million from five investors including hedge fund Tiger Global Management for a post-money valuation of $5.4 billion.
Kotak Mahindra Capital, Morgan Stanley India, Credit Suisse Securities India, BofA Securities India and Citigroup Global Markets India are the lead book-running managers for Zomato's IPO.
Zomato and Infoedge did not offer any comment on CNBC-TV18’s query on valuations.
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