Zomato raises ₹4,197 crore from 186 anchor investors, oversubscribed by 35 times

• Zomato has raised ₹4,197 crore from 186 anchor investors
• Singapore Government, Morgan Stanley, Tiger Global and others have bid for the IPO.
• The company will open its IPO for retail investors on Wednesday at a price band of ₹72-76.

Zomato has raised ₹4,197 crore from 186 anchor investors on Tuesday, July 13, a day before the food delivery and restaurant aggregator business opens its initial public offering (IPO) for retail investors.

Several media reports citing sources have highlighted that Zomato got about 30-35 times more bids from anchor investors than it intended to sell in the first place.

Marquee investors such as Government of Singapore, Morgan Stanley Investment Fund, Tiger Global Investment Fund, Baillie Gifford Pacific Fund, Fidelity Fund, New World Fund, Canada Pension Plan Investment Fund and Kotak Flexi Cap Fund, among others, were allotted more than 2% of the anchor book.

Other anchor investors include JPMorgan, UTI Mutual Fund, Motilal Oswal AMC, HDFC Mutual Fund, ICICI Prudential Mutual Fund, Tata Mutual Fund, Goldman Sachs India, Abu Dhabi Investment Authority, Franklin Templeton, HSBC Asset Management (India).

The company has informed the stock exchange that it had allotted 55.22 crore equity shares to the said anchor investors for ₹76 per equity shares. A total of 75% of the issue has been reserved for qualified institutional buyers (QIB), of which anchor investors make up for about 45% of the total issue size. About 25% shares have been reserved for high net with individuals and retail investors.

Zomato intended to raise ₹9,375 crore with this IPO. About ₹9,000 crore will be a fresh issue and ₹375 crore will be a secondary issue by InfoEdge. The company will open its IPO for retail investors on Wednesday, July 14, at 10 a.m., at a price band of ₹72-76.

Stockbroking firms and analysts do not have a unanimous call on whether retail investors should subscribe to Zomato’s issue or not. While a few have encouraged retail investors to go ahead, a few have raised caution about the company’s financial performance so far and and in the future.

Motilal Oswal said that investors with high risk appetite can subscribe to the Zomato issue, whereas Choice Broking has recommended users to subscribe with caution.

Motilal Oswal said that Zomato is placed at a sweet spot as the online food delivery market is at the cusp of evolution, but predicting the growth trajectory at this juncture is a little tricky for the next few years. Valuing such early-stage businesses on a plain vanilla financial matrix might not give the right picture and may look distorted, the brokerage added.

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