The initial public offer of Zomato will open for subscription on Wednesday at a price band of Rs 72-76 per share. Being the first IPO from a unicorn (a start-up with valuation of more than $1 billion) and a web aggregator, the issue has generated immense buzz with analysts recommending the shares for listing gains.
Some others have cautioned against its expensive valuation and have recommended the shares to those with a high appetite for risk. Investors must buy a minimum of 195 shares in the IPO which comprises a fresh issue of equity shares worth Rs 9,000 crore and an offer-for-sale (OFS) of Rs 375 crore by Info Edge (India) Ltd.
“The IPO is interesting considering the fact that its the first from a unicorn and also from a technology platform. The market reaction to the issue is mixed, but it does offer some listing pop as of today,” says Arun Kejriwal, director, KRIS, an investment research firm. The grey market premium for the issue has reportedly dropped to Rs 9-10 per share from over Rs 20 at one point of time.
Brokerage LKP Securities said the company’s food delivery business has grown rapidly since 2019, while its unit economics has improved consistently.
Analysts at Motilal Oswal said Zomato operates in a highly underpenetrated market: of the total food consumption in the country restaurants make up 8-9 per cent, of which only 8 per cent is online food delivery.
Analysts at Choice Broking said the Zomato issue was overpriced as the price-by-earnings-per-share multiple was 29.9 which is at a premium to the global peer average.
“This initial public offer is not for the retail investor, but investors with higher risk appetite with long term investment horizon can apply,’’ the brokerage noted.
MobiKwik
One MobiKwik Systems, the digital payments start-up, has filed draft papers with Sebi to raise Rs 1,900 crore through an IPO. The IPO comprises fresh issue of equity shares worth Rs 1,500 crore and an offer for sale of up to Rs 400 crore by promoters and existing shareholders.
Meanwhile, the Securities and Exchange Board of India has reportedly begun a preliminary enquiry into the preferential issues of Barbeque Nation and LIC Housing Finance.
Sebi’s move is linked to the controversial preferential allotment by PNB Housing Finance to Carlyle, which is now being heard at the Securities Appellate Tribunal.
A CNBC TV-18 report on Tuesday said Sebi has asked the stock exchanges to examine the proposed preferential issues of Barbeque Nation and LIC Housing Finance and that the bourses may have issued an examination notice to both these firms on the valuation of the preference issue.
Kredent fund-raising
Calcutta-based startup Kredent InfoEdge has raised Rs 10 crore from Kotak Securities .
The startup, which offers data analytics and equity market learning to its 2 million users, has set its sights on expanding its user base to 10 million by 2023. The company is backed by investors such as Ramesh Damani and IndiaMart founder Dinesh Agarwal.
“We have created the leanings and data analytics platform. Now we will connect with all the brokers so that anyone who is consuming data analytics from us can transact through the respective brokers,” said Vivek Bajaj, co-founder and director, StockEdge & Elearnmarkets.
