Food delivery unicorn Zomato’s shares fell nearly six percent on Wednesday during early trade on the BSE. This is the second session Zomato saw its shares plummet after registering solid gains for two earlier consecutive sessions.
The online food delivery giant’s shares surged as much as 13 percent on the BSE on Monday, hitting an intraday high of Rs 143 per share after a bumper listing on July 23. It was up over three percent in early trade on Tuesday but fell later due to overall market weakness.
Zomato made a stellar debut on bourses on July 23, listing at Rs 116 on the NSE, garnering a 52.63 percent premium over its issue price of Rs 76 per share. On BSE, the unicorn got listed at 115, a premium of 51.32 percent.
The Rs 9,375-crore initial public offering (IPO) of Zomato witnessed strong interest from investors as the issue was subscribed 38.25 times during July 14-16. The offer received bids for 2,751.27 crore equity shares against the IPO size of 71.92 crore equity shares.
Zomato entered the exclusive club of top 50 companies in terms of market capitalization after listing. The market cap of the food-tech startup stands at Rs 1,00,222 crores, nearly 50 percent higher than its market cap at the issue price which stood at Rs 65,000 crore - at the issue price of Rs 76.
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.
Zomato is the first Indian unicorn to go public and will be followed by other startups including PayTm, Policy Bazaar, among others.
At 9:45 am, Zomato’s shares were trading 5.30 percent lower at Rs 125.85 apiece on the BSE.