The initial public offering (IPO) of the online food delivery platform Zomato has been subscribed 38.25 times on July 16, the third and last day of bidding. The offer has received bids for 2,751.27 equity shares against the IPO size of 71.92 crore equity shares.
The portion reserved for retail investors has been subscribed 7.45 times, while that of non-institutional investors' 32.96 times, as per the subscription data available on the exchanges.
The portion set aside for employees is subscribed 62 percent, and that of qualified institutional buyers have been subscribed 51.79 times.
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.
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.
Brokerage house KR Choksey believes Zomato is very richly valued at $9 billion given its status as a company that is yet to make any profit. However, as it is the first start-up in the Indian food aggregator space to be listed on the bourses, the enthusiasm among the investors about the IPO is tremendous.
"Also, the company has a unique status as a unicorn in the Indian food delivery space. From the valuation perspective, we are not very comfortable with the sky-high valuation that the IPO is valued at. As a result, we recommend our investors to ‘subscribe’ to the issue only for listing gains," KR Choksey said.
First Published: IST