Zomato is all set to begin its three days initial public offering(IPO) from July 14. With this offering, Zomato will become the first food tech firm in India to start its IPO.
Let’s have a look at the key facts about Zomato IPO and its operations:
Zomato will offer a fresh issue of Rs 9000 crore and the sale of shares worth Rs 375 crore from Info Edge, the largest shareholder in Zomato. Over Rs, 6745 crores of current IPO proceeding will be used by Zomato for its future growth through different means, as per Zomato’s Red Herring Prospectus(RHP).
The price band has been fixed from Rs 72 to Rs 76. That makes Zomato market value around $8 billion. The face value of a share is fixed at Rs 5. An individual can bid for a maximum of 195 equity shares. The shares will be listed in the Bombay Stock Exchange(BSE) and National Stock Exchange(NSE) both.
Kotak Investment, Morgan Stanley, BofA Securities and others are the assigned book running lead managers authorized by Zomato.
Other Key Details About Zomato
Info Edge leads the chart in terms of the leading shareholder in Zomato with 18.5% shares. Uber, Alipay Singapore, and Ant Financial hold 9.1%, 8.3%, and 8.2% stakes respectively. Tiger Global, Sequoia Capital, and Deepinder Goyal are the other three major shareholders of Zomato. Berlin-based Delivery Hero has 1.5% shares of the online food delivery giant.
Founded in 2008, Zomato has three key business operations: food delivery, dining out, and hyper pure. Under food delivery operations, it provides fast food delivery service to its customers with the help of its restaurant partners.
Zomato helps restaurant firms in acquiring customers via different tools under dining out the operation. With the help of hyper pure services, the food giants deliver food ingredients and other kitchen items to their restaurant partners.
For listed hotels and restaurants on its app or web portal, Zomato charges commission from them. For better visibility on its online platform, Zomato charges extra service charges from restaurant owners. This is the major source of revenue for Zomato. Delivery charges and tips are forwarded to its delivery partners.
Zomato Pro is another source of revenue for the firm where it charges a fixed monthly/yearly subscription fee from the customers if they need it. Such customers receive extra offers, fast deliveries, and other unique offerings from Zomato.
Zomato is a global food delivery giant. But, overseas operations’ contribution is minimal. As per Zomato’s IPO filings, it receives a tenth of its business and 2.5% of its total assets from global operations.
Currently, Zomato has a network of 1,69,802 delivery partners with 3,89,932 listed restaurants. 1,48,384 listed restaurants are active for food delivery to Zomato’s customers. The food giant has a huge presence in 525 Indian cities and 23 countries outside India. 15 lakh users have subscribed to Zomato’s Pro services till now, as claimed by the online food delivery giant.
Pandemic hit the food delivery businesses very badly. Due to that, Zomato’s revenue dropped by 23.4% to Rs 1994 crore in the fiscal year ended on March 2021. Zomato reduced discounts and other offers to cut its losses by one third to Rs 812 crore in FY2021 compared with Rs 2367 crore losses in FY2020.