Zomato Ltd, the Indian food delivery will launch its initial public offering (IPO) on July 14 at a price band of Rs 72-76 per equity share. The offer will close on July 16 and will be the largest after the SBI Cards and Payments System’s offer worth Rs 10,355 crore launched in March 2020.
In an interview with CNBC-TV18, Bhavin Shah, founder & fund manager of Sameeksha Capital and Karan Taurani, senior vice president-research at Elara Securities discussed the prospects of the initial public offering.
As per Taurani, “In terms of valuations, they are at the upper end because they are coming at a valuation of about $8.5 billion. So for an investor to make money over the next five years, there is not too much to offer from hereon. We believe CAGR of 7-8 percent is what is possible from current levels.”
Meanwhile, according to Shah, “The concept of not missing out is uncomfortable for me as an investor. In fact, in our portfolio, we only invest in 25-30 companies. So we are always missing out on a large number of companies for A or B reasons. So the idea that one has to buy something because you are going to miss out, I am not a subscriber to that idea.”
Therefore, he would look at 60 percent below the IPO price.
For the entire discussion, watch the video