Zomato Files For $1.11 Billion IPO As Food Delivery Surges In Pandemic Times
Food delivery startup Zomato, backed by China's Ant Group, has filed for an initial public offering of up to ₹ 82.5 billion ($1.11 billion) as consumers increasingly turn to ordering food online during the COVID-19 pandemic.
Launched in 2008, Zomato is one of India's most prominent startups. It is present in 24 countries and employs more than 5,000 people, according to its website. In February, the company had raised $250 million from five investors including hedge fund Tiger Global Management for a post-money valuation of $5.4 billion.
According to draft papers submitted to India's market regulator on Wednesday, Zomato's offering will comprise a fresh issue of shares worth up to ₹ 75 billion.
The company said it intends to use the proceeds to fund growth initiatives and general corporate purposes. Top shareholder Info Edge will sell shares worth ₹ 7.5 billion in the IPO. The company, along with domestic rival Swiggy, backed by Accel, dominates the Indian food delivery market, which research firm RedSeer estimates is worth $4.2 billion.
India has been one of the hottest IPO markets so far in 2021, helped by a flood of foreign money and high interest from mom-and-pop investors. However, since late March, a second wave of coronavirus infections has dampened investor enthusiasm for stocks and IPOs.
Well-known domestic brands and names such as Barbeque-Nation Hospitality and Macrotech Developers saw a muted response to their stock market listings.
Kotak Mahindra Capital, Morgan Stanley India, Credit Suisse Securities India, BofA Securities India and Citigroup Global Markets India are the lead book running managers for Zomato's IPO.