Everything you need to know about the Zomato IPO

If a company wants to issue an IPO, it goes through a series of steps. Most of these steps involve filing documents with various regulatory bodies.

The first major step towards launching an IPO is filing the Draft Red Herring Prospectus (DRHP) with SEBI (i.e. capital markets regulator). This document contains the recent financials of the company, its history, and any other information pertinent to the IPO.

Zomato recently filed its DRHP with SEBI

As Zomato heads toward launching its IPO, you may want to check some of its financials. Here is a summary of its recent financials picked from the DRHP:

Particulars Nine-month period ended Dec 2020 Fiscal 2020 Fiscal 2019 Fiscal 2018
Equity Share capital (in Rs. crores) 0.031 0.03 0.03 0.03
Net worth (Rs. crores) 6,330.07 2,083.10 2,596.75 1,207.85
Revenue from operations (Rs. crores) 1,301.34 2,604.73 1,312.58 466.02
Loss for the period/year (Rs. crores) (682.19) (2,385.60) (1,010.23) (106.91)
Basic earnings per share (8,496.65) (34,121.10) (16,027.31) (2,243.76)
Diluted earnings per share (8,496.65) (34,121.10) (16,027.31) (2,243.76)
Net asset value per equity share 78,863.30 30,026.70 43,130.82 26,140.47

Can a loss-making firm launch an IPO?

Yes, it can. However, the portion of the IPO reserved for the retail category changes from the usual 35% to 10% of the overall issue size. We’ve covered the details on this post.

When will the Zomato IPO launch?

The timeline of the IPO is yet to be disclosed. Once it is, you’ll be able to check it on this page.

Issue size

One of the existing shareholders of Zomato is a listed company - Naukri. It will be selling Rs. 750 crores of shares in the IPO. Zomato is planning to raise 7500 crores in form of a fresh issue of shares. This will make the IPO a Rs. 8,250 crore issue.

Zomato vs Food Delivery Industry

Zomato seems to have grown 7x since 2018 compared to the 3.6x growth of the overall food delivery industry:

Growth Potential

Zomato has been growing at a very fast pace but how much headroom does the company have? This table comparing the total addressable markets in India, US & China may give us some indication:

Media Coverage:

  1. Indian Express - Zomato files DHRP with SEBI for its much-awaited IPO; aims to raise up to Rs 8,250 crore
  2. Moneycontrol - Food delivery platform aims to raise Rs 8,250 crore, Info Edge will sell a part of its investment
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Most of the Indian unicorns are huge loss-making companies despite increasing revenue.

No doubt it will be oversubscribed by huge numbers, remains to be seen when will they actually be profitable.

This is just the DRHP. It won’t include any details such as price, number of shares or any dates. This all will announce later.

I like Swiggy better than Zomato. :sweat_smile:

From service, innovation - started Grocery delivery and Swiggy Genie service during lockdown where delivery boys can pick/ deliver stuff from point A to B. And even about branding and marketing, Swiggy is way ahead. Softbank had two options to invest in - Zomato and Swiggy. It chose the latter one recently. Info Edge is selling its stocks. Sanjeev Bikhchandani must be thinking something.

Disclaimer: Since covid began, I haven’t eaten any outside food. It’s been a year-long maraton (and counting) of daily cooking.

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Explain very nicely

What happened to that influencer vs Kamraj delivery boy harassment case? :thinking:

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