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BENGALURU (Reuters) – Shares of food delivery company Zomato Ltd nearly doubled on Friday in a stellar first listing of a local unicorn in India, setting the tone for a slew of such debuts by internet startups who thrive during the COVID-19 pandemic.
Paytm, backed by Berkshire Hathaway Inc, hotel company Oyo Hotels and ride-sharing company Ola, both backed by SoftBank, are among Indian startups ready to enter the market, with backing from foreign funds and local investors.
Zomato shares soared 82.8% after opening at 116 rupees pre-opening, a 53% premium over the 76 rupee offering price for the 93.75 billion rupee IPO , valuing the company at around $ 12 billion.
Chinese group Ant has a 16.53% stake in Zomato, while its largest shareholder is online technology company Info Edge (India), which has an 18.55% stake.
“Today is a big day for us … we couldn’t have made it here without the incredible efforts of the entire Indian internet ecosystem,” said Zomato Founder and CEO Deepinder Goyal, bit.ly/3kHPT3Y in a blog post.
Goyal, 38, a former student of the Indian Institute of Technology in Delhi, started Zomato in 2008 with his graduate colleague Pankaj Chaddah. As of March 31, it operated in approximately 525 cities in India and had partnered with nearly 390,000 restaurants.
It is the first startup to go public in the Indian food delivery market, which research firm RedSeer estimates at $ 4.2 billion. It offers door-to-door food delivery, allows customers to book tables for on-site dining, and collects restaurant reviews, making it a competitor to SoftBank-backed Swiggy and Amazon.com’s food delivery service. .
The company’s bid last week attracted $ 46.3 billion in offers, making it more than 38 times oversubscribed, with large institutional investors placing large bets.
“Growth is the key here. Zomato may not be profitable, but it is growing exponentially and is ideally positioned to maintain that momentum, ”said Danni Hewson, financial analyst at AJ Bell, an investment platform in England.
Zomato’s loss for the fiscal year ended March 31 narrowed to 8.13 billion rupees, while operating income declined slightly year-on-year to 19.94 billion rupees.
“We are not going to change our course for short-term profits at the expense of the long-term success of the business,” Goyal said.
($ 1 = 74.5250 Indian rupees)
Reporting by Chandini Monnappa and Anuron Kumar Mitra in Bengaluru; Editing by Arun Koyyur and Kim Coghill
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