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Zomato receives strong response from investors; will use IPO proceeds to fund growth

Updated : July 14, 2021 20:27:03 IST

Zomato's Rs 9,375 crore IPO opened for subscription on July 14 and by end of day it was fully subscribed. 75.64 crore equity shares against the IPO size of 71.92 crore equity shares.

Zomato's IPO marks the first new tech IPO to list on the Indian bourses and has received huge interest from retail investors as the portion reserved for them has been subscribed 2.7 times.

In a conversation with CNBC-TV18, Zomato co-founder Gaurav Gupta said, “For our business, it is important to understand the opportunity we are tapping today and the opportunity that lies out there. A lot of meals today come from homes and not from restaurants and that is where the real opportunity lies.”

“Our endeavour is to make sure we work closely with the restaurant industry to make sure more and more people consume restaurant food than they do today and that is what is interesting,” he said.

The market, he said, has evolved over the last 2-3 years to a point where our unit economics have become much better than earlier. “For us, it is all about making sure mature parts of the business are running on good unit economics, while we continue to acquire more and more new users to grow this opportunity that we spoke about,” said Gupta.

Zomato plans to use the IPO proceeds to fund organic as well as inorganic growth initially, Gupta said. “We are very open in terms of whatever is the right route to grow,” he added.

Talking about investor appetite, he said, “We got very good response from global and domestic investors as part of the anchor book. We have 150-plus high-quality investors across sovereign funds, pension funds, global mutual funds, global tech funds and it was great to see the response that we got.”

According to Gupta, a lot of the retail and non-institutional investors in India are smart. He said they will invest in Zomato like they would invest in other stocks and make the right decision for themselves. “There are so many consumers who love Zomato and so that should help as well,” he added.

For the entire conversation, watch the accompanying video
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