Zomato, India's largest meal delivery service, made a strong start on Dalal Street on July 23, opening at Rs 116 on the NSE, a 52.63 percent premium to its final offer price of Rs 76. On the Bombay Stock Exchange, the listing price was Rs 115, up 51.32 percent.
After a great start on Dalal Street, the company's market capitalisation surpassed Rs 1 lakh crore, standing at Rs 1,08,067.35 crore, beating out IOC, BPCL, and Shree Cements.
The Rs 9,375-crore initial public offering, which was open for subscription from July 14 to 16, received a fantastic reaction from investors, with 38.25 times subscription, the most in the last 13 years among IPOs worth more than Rs 5,000 crore.
Despite high valuations, the IPO was mostly in line with experts' expectations. The debut premium is ascribed to the company's first listing in the food delivery industry, strong market sentiment, healthy investor demand, consistency in increasing market share, and predicted better financial performance.
Incorporated in 2010, Zomato through its technology platform connects customers, restaurant partners and delivery partners, serving their multiple needs. On the other hand, it provides restaurant partners with industry-specific marketing tools which enable them to engage and acquire customers to grow their business. It also operates a one-stop procurement solution, Hyper-pure, which supplies high quality ingredients and kitchen products to restaurant partners.
In addition to its business-to-business (B2B) offering Hyperpure, it offers two major business-to-customer (B2C) offerings: Food delivery and Dining-out. Zomato Pro, a customer reward programme that includes both meal delivery and dining-out, is another aspect of the company's operations.
From October 2020 to March 2021, Zomato continually increased market share to become the category leader in India in terms of gross order value (GOV). Food delivery and the corresponding charges charged to its restaurant partners for using the platform account for the majority of its revenue.
Analysts said the FoodTech market has shown huge prospects and attracted heavy investments as India online food delivery market. Hence they believe India is going through a revolutionary phase in the last few quarters.
