Zomato, the food delivery giant, is all set to start its Initial Public Offering(IPO) journey in the coming days. The firm has submitted the IPO-related documents to the Securities and Exchange Board of India(Sebi).
Zomato’s IPO Preparation
The online food delivery firm has sent it is Draft Red Herring Prospectus (DRHP) with Sebi. Zomato IPO is the most awaited one this year. It may decide a lot of things about the Indian startup ecosystem.
As per DRHP filed by Zomato, the startup will sell equity shares of around $1.1 billion(Rs 8250 crore). Out of these total equity shares, Rs 7500 crore is the fresh offering, whereas Rs 750 crore equity shares belong to Info Edge, an existing investor that is planning to sell its stake.
In a released statement on 27th April, Info Edge revealed that it is ready to sell its shares worth Rs 750 crore in the upcoming IPO.
Zomato completed all its internal processes related to the IPO on April 22, 2021. Sebi may take around half a month to review the IPO documents of Zomato. Finally, an IPO launch may depend on the condition of the stock market, as revealed by an insider.
Zomato’s Fund Raise and other Formalities related to IPO
Recently, Zomato converted its firm status to a public company. Now, it is known as Zomato Limited. The company spokesperson said that changing the status was compulsory to file the DRHP documents for IPO proceedings. Earlier, the online food delivery giant got the private limited company status on January 19, 2010.
DRHP is the initial draft that a firm has to submit with Sebi for listing its shares on a stock exchange. This document contains the details like firm start date, business model description, different risks involved with the firm, and other key things.
Zomato IPO discussion is on from August in 2020. Zomato was raising funds from its investors like Temasek and Tiger Global for the 2021 IPO.
A few months back, a food delivery startup raised $250 million from investors such as Kora Management, Tiger Global, Fidelity, Dragoneer, and Bow Wave. It was a pre IPO fundraising event. After this financial round, Info Edge declared that it has an 18.4% stake in Zomato.
The firm also raised around $660 million in the last month of 2020 from new investors including Tiger Global, Kora, Luxor, Fidelity (FMR), D1 Capital, Baillie Gifford, Mirae, and Steadview. Zomato revenue also got doubled in FY20.
Recently, the Covid pandemic has jolted the Indian market very badly. It will be very interesting to see when Zomato announces its IPO for public sale. The current scenario has brought a lot of uncertainty to the Indian startup ecosystem. India is on the verge of a national lockdown again. It will affect the businesses of online food delivery platforms like Swiggy and Zomato.