Zomato, food delivery app will be the first Indian technology to come out with the public stock issue this year and is likely to raise between $750 million to $1.0 billion with its Initial public offering (IPO). However, the great thing about Zomato IPO is that none of the existing investors are likely to go out or participate in selling their stake in this regard. Zomato’s co-founder, Deepinder Goyal earlier this week, has announced to the company’s staff at the town hall that its IPO could be a 100% primary issue, recalling the long-term incentive investors expect. This means the company will eventually raise more money, rather than shareholders selling the stake to public market investors, Goyal said.
As per the statement of Zomato’s co-founder, no existing shareholder is willing to sell any shares in our IPO. People think Zomato will be a $50 billion company in five years (CEO hopes) and it would not be wise to sell shares right now. What needs to be mentioned here is that development is very important as it will create a huge battle chest for Zomato as it strengthens the growth of its battle with a competition like Swiggy that has already collected fund of $800 million in its new funding round. The Bengaluru-based company is in the process of negotiating a $700-800 million bond led by Qatar Investment Authority’s financial portfolio of Singapore’s GIC shareholding and global asset manager Falcon Edge.
Zomato’s proposed IPO could arrive in June 2021 for $6.0-8.0 billion. Recently, Zomato closed $250 million in total and with $250 million sold by existing investors such as China’s Ant Financial. The transaction increased the value of the company in Gurugram by $5.4 billion, up from $3.9 billion in December when it closed its long -drawn $660 million financial round. Zomato IPO’s expectations are high especially after the successful SoftBank-backed Door-Dash IPO in December 2020, when the start of the US-based food delivery opened the trade at $182, about 78% higher than the IPO price, on the New York Stock Exchange (NYSE). Door-Dash, which raised around $3.4 billion, would have cost $34.2 billion, more than double the $15 billion it had invested in the private market last year. On Tuesday, the DoorDash’s market cap stood at $53.6 billion.
