Zomato IPO: Issue subscribed 4.8 times on Day 2

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Zomato IPO has received bids for 345.13 crore equity shares against the offer size of 71.92 crore equity shares.

Zomato IPO: Issue subscribed 4.8 times on Day 2
The initial public offering (IPO) of the online food delivery platform Zomato has been subscribed 4.8 times on July 15, the second day of bidding. The offer has received bids for 345.13 crore equity shares against the IPO size of 71.92 crore equity shares.
The portion reserved for retail investors has been subscribed 4.73 times, while non-institutional investors have put in bids for 45 percent against their reserved portion, as per the subscription data available on the exchanges till 5:00 pm.
The portion set aside for employees is subscribed 36 percent, while that of qualified institutional buyers have seen 7.07 times subscription.
The IPO size has been reduced to Rs 5,178.49 crore from Rs 9,375 crore earlier as Zomato already raised Rs 4,196.51 crore from 186 anchor investors on July 13, a day before the public opening of the issue.
The price band for the offer, which closes on July 16, is Rs 72-76 per share.
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Brokerages have recommended investors with high-risk appetites subscribe to the issue only for listing gains.
However, given the strong network effects, increasing frequency of order, huge scope for growth in tier-II and tier-III cities, and large addressable market, the long-term outlook looks promising for Zomato, brokerages said.
"Zomato is yet to turn profitable. However, this new-age digital platform offers strong growth potential, which at present is evolving on the back of favourable macroeconomics, changing demographic profile, rising adoption of tech infrastructure. Hence, we recommend ‘subscribe’ to this IPO," said ICICI Direct.