The Indian startup unicorn Zomato can be a great investment opportunity for a long time as it has an immense scope of business, believes Nilesh Shah, MD & CEO of Envision Capital.
Speaking to CNBC-TV18, Shah said that the Zomato story will stay here for decades.
“To me, Zomato is a phenomenon which is here to stay for next several years, it’s a story for a decade. This is one of those solid platform opportunities which basically is coming in for public markets,” Shah said.
Shah is of the view that investors should put their money in Zomato’s IPO with a long term perspective, even though its valuations look “frothy” in the short term.
“I do not know how the stock is going to behave on the listing or over the short to medium–term given that valuations are elevated. But over the next 5-10 years, this will come up to be a solid investment opportunity. So, if one is looking at investing in something like Zomato then will have to be ready for a much longer timeframe or not have a timeframe and that’s the best way to deal with it,” added Shah.
Meanwhile, the initial public sale of Zomato sailed through on the first day itself. The IPO has been subscribed 1.33 times so far on July 15, the second day of bidding, led by strong demand from retail investors.
The offer has received bids for 95.86 crore equity shares against the IPO size of 71.92 crore equity shares. The portion reserved for retail investors has been subscribed 3.99 times, while non-institutional investors have put in bids for 27 percent against their reserved portion, as per the subscription data available on the exchanges.
Further, Shah also sees stable-to-solid growth in market intermediaries like CAMS, CDSL and BSE. He believes Angel Broking might emerge as a very strong fintech firm going ahead.
“This is a stock picker’s market and will remain so in the coming years,” he said.