Online food delivery platform Zomato has raised a little over Rs 4,196 crore from anchor investors on July 13 ahead of its initial share sale, which opens for public subscription today.
The company has allocated 552,173,505 equity shares to anchor investors at Rs 76 apiece, aggregating the transaction size to Rs 4,196.51 crore, according to a circular uploaded on the BSE website.
BlackRock, Tiger Global Investments Fund, Fidelity, New World Fund Inc, JP Morgan, Morgan Stanley Asia (Singapore) Pte-ODI, Goldman Sachs (Singapore) Pte -ODI, T Rowe, Canada Pension Plan Investment Board, Government of Singapore, Monetary Authority of Singapore and Abu Dhabi Investment Authority are among the anchor investors.
The domestic investors who participated in the anchor bidding include Kotak Mutual Fund (MF), Aditya Birla Sun Life MF, Axis MF, SBI MF, UTI MF, HDFC MF, ICICI Prudential MF, IDFC MF, Sundaram MF, Edelweiss MF, ICICI Prudential Life Insurance Company and HDFC Life Insurance Company.
The Rs 9,375-crore initial public offer (IPO) of Zomato is opened for public subscription from July 14-16 at a price band of Rs 72-76 a share.
The offer 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.
Analysts believe the company has certain positivities like asset-light scalable business model, expanded target market post the pandemic, first-mover advantage in the food delivery business, etc. But its operations in an almost duopoly market may attract regulatory actions, which would be negative for the company.
Hence, brokerages have recommended investors with high-risk appetites subscribe to the issue only for listing gains.
Meanwhile, Nikhil Kamath, Co-founder and CIO, True Beacon and Zerodha, said that Zomato IPO will pave way for other Indian startups to go for initial share sales in the Indian market.
“I feel markets are always ready to accept and accommodate good business, everything depends on how the company sustains its growth and profits going forward. The post-COVID second wave looks conducive for the IPOs,” Kamath added.
Zomato proposes to utilise the proceeds from the fresh issue for funding organic and inorganic growth initiatives and general corporate purposes.
In February, Zomato had raised USD 250 million (over Rs 1,800 crore) in funding from Tiger Global, Kora, and others, valuing the online food ordering platform at USD 5.4 billion.
Kotak Mahindra Capital Company Limited, Morgan Stanley India Company Private Limited, and Credit Suisse Securities (India) Private Limited are the global coordinator and book running lead managers to the issue.
BofA Securities India Limited and Citigroup Global Markets India Private Limited have been appointed as merchant bankers to the public issue.