Here are some things to consider before investing in the online grocery delivery platform Zomato

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Mumbai: The initial public offering (IPO) of the online food delivery platform Zomato is scheduled to open on Wednesday (July 14th) and to close on July 16th. Zomato will be the first consumer internet companies and startups to raise money in a post-pandemic era.

What you should know about Zomato IPO

The IPO will open for subscription from July 14th to July 16th and the company will complete the allotment of IPO shares by July 22nd. Funds will be refunded or unlocked from the Application Supported by Blocked Amount (ASBA) account around July 23, 2021.

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The price range of the issue is held at Rs 72-76 per share. The offering includes fresh shares valued at Rs 9,000 billion and an offer for sale (OFS) from Info Edge, the parent company of Naukri.com. The company’s investors include Info Edge, Ant Financials, and Uber. However, the company does not have a promoter.

Kotak Mahindra Capital Company, Morgan Stanley India Company Pvt Ltd and Credit Suisse Securities (India) Pvt Ltd are the global coordinators and lead managers of the issue.

What are the finances of the online delivery giant?

Zomato’s sales for the first three quarters of FY2021 were Rs.1,367 billion. The food tech company’s spending was around Rs.1,724 billion, resulting in a loss of Rs. 684 billion.

In a recent press conference, Zomato’s leadership said the deal had no negative impact during the second compared to the first wave of Covid. Zomato’s sales increased 96 percent in FY 2020 from Rs 1,398 crore in FY 2019 and Rs 2,743 crore in FY 2020. Zomato has at least 403 million online orders with a gross order value of Rs. 11,221 crore in FY 2020. Last year bid Zomato offers delivery services in around 500 cities across India with over two lakh delivery partners.

Should you invest in Zomato IPO?

The company saw strong business growth due to the pandemic and the increase in online orders. It will be important to understand how the company intends to sustain this growth after the situation normalizes. Even if the online food segment still represents a high entry barrier for new players, growth can be expected as the market size increases. However, there will always be challenges and uncertainties in the market at all times. In case you can’t buy stocks, wait a few days and understand the consumer internet company
and post-listing interest of investors before making a decision to invest. It is important to go through the quality of the business, management, and other fundamentals in detail before investing in an issue.



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