Foodtech startup Zomato is looking to raise Rs 8,250 crore via an initial public offer and has filed a draft red herring prospectus (DRHP) with market regulator SEBI on Wednesday.
The offer will comprise a fresh issue of equity shares aggregating up to Rs 7,500 crore and a Rs 750 crore offer for sale from investor Info Edge.
Here are some of the key highlights on Zomato's business, outlook, as well as plans for fundraising and capital deployment:
Pre-IPO placement likely
Zomato said in its DRHP that the company may, in consultation with the managers, consider a private placement of up to Rs 1,500 crore, prior to the filing of the Red Herring Prospectus with the RoC.
"The Pre-IPO Placement, if undertaken, will be at a price to be decided by our Company in consultation with the Managers. If the Pre-IPO Placement is undertaken, the minimum Offer size (comprising the Fresh Issue so reduced by the amount raised from the Pre-IPO Placement, and the Offer for Sale) shall constitute at least 10% of the post-Offer paid-up Equity Share capital of our Company," the company said.
How Zomato plans to Use IPO Proceeds
Zomato said it will utilise Rs 5,625 crore for funding organic and inorganic growth initiatives.
"We expect to utilize at least 40% of the proposed deployment towards funding organic growth initiatives," the company said.
The company's organic growth initiatives will comprise:
"We believe that we have benefited significantly from the acquisitions undertaken by us in the past. We will from time to time continue to seek attractive inorganic opportunities that we believe will fit well with our strategic business objectives and growth strategies," Zomato said.
Zomato's Losses to Continue
Zomato said that it expects costs to increase over time and losses will continue given significant investments expected towards growing the business.
Here's a look at Zomato's losses over recent years:
Losses for the year/period of
FY18: Rs 1,069.16 million
FY19: Rs 10,102.33 million
FY20: Rs 23,856.01 million
Nine months ended Dec 2020: Rs 6,821.99 million
Here are some factors Zomato has listed that may affect their future results: