After a bumper debut listing, Ant Group-backed food delivery app Zomato Ltd’s shares continued the momentum to end 65.5% above the offer price, setting the tone for digital payment firm Paytm’s upcoming float.
The homegrown food firm had jumped 52.6% above the offer price in market debut. It ended the day at Rs 125.85 per share, a 9.4% jump over the listing price.
Advanced by four days, Zomato’s listing comes at a time of market bull run.
By 11 am, the firm’s stock had touched day’s high of Rs 138 per share, up 81.5%, resulting in a market capitalisation of over Rs 1.08 lakh crore ($14 billion).
The company had filed for an IPO in late April, seeking a valuation of $8 billion.
It was valued at $5.4 billion in February when it raised $250 million from five investors in a round led by Kora Management.
Before that, the company was valued at $3.9 billion in November 2020 when it had raised $145 million.
Capitalising on the pandemic-led surge in online ordering, Zomato’s IPO is the first Indian internet unicorn to make its stock market debut on Friday taking its market valuation to Rs 90,219 crore ($12 billion).
It is the largest to hit the Indian bourses since SBI Cards and Payment Services’ Rs 10,341 crore IPO in March 2020.
The Rs 9,375 crore mega public issue of Zomato was subscribed 38.25 times with big institutional investors also placing major bets.
Meanwhile, investment bankers handling Zomato’s IPO also earned Rs 229 crore in fees, as per final offer documents, making it one of the biggest payouts for any Indian IPO.
Zomato was founded by Pankaj Chaddah and Deepinder Singh Goyal in 2008 as India’s multinational restaurant aggregator and food delivery tech company. It operates in about 525 cities across India and partners with almost 390,000 restaurants.
In the year ending March 2021, Zomato's losses narrowed to around $110 million, even as its revenue from operations fell slightly.
In India, the firm faces competition from SoftBank and Accel-backed Swiggy and Amazon's food delivery service.