Indian food delivery giant Zomato targets $8bn valuation in IPO

Bengaluru —  Indian food delivery company Zomato’s initial public offering (IPO) is priced at 72  to 76 rupees per share, giving it a valuation of as much as $7.98bn, the company said on Thursday, as it cashes in on a pandemic-led surge in online ordering.

Zomato, backed by China’s Ant Group and one of India’s most prominent start-ups, said its offer will include a fresh issue of shares worth up to 90-billion rupees and a share sale worth up to 3.75-billion rupees by top shareholder Info Edge (India), taking the total offering to 93.75-billion rupees ($1.25bn) according to a filing.

At the upper end of the price range, Zomato’s market value comes up to 596.23-billion rupees ($7.98bn), with subscription set to open on July 14.

Zomato, launched in 2008, collates restaurant reviews and offers home delivery of food, making it a competitor to Accel-backed Swiggy and Amazon’s food delivery service.

“While we had a footprint across 23 countries outside India as of March 31 2021, we have taken a conscious strategic call to focus only on the Indian market going forward,” Zomato said in its prospectus.

In India, an ongoing wave of Covid-19 has pushed many patrons towards ordering in, a trend that has helped companies such as Zomato and its peers.

The company had filed for an IPO in late April.

“In terms of valuation, financials and future business prospects, we feel things are going to look good for Zomato in the near-term,” said Shikher Jain,  fundamental equity research manager at Anand Rathi in Mumbai.

The chief of Oyo Hotels, another Indian start-up, said on Wednesday coming IPOs would be looked at very closely as the SoftBank-backed hospitality firm is considering a potential offering.

Reuters