Zomato shares continue rally on the stock market after bumper IPO

Zomato's shares opened at ₹116 and surged 65 percent in its stock market debut on 23 July, turning its founder, Deepinder Goyal, into a billionaire. It ended trading at ₹125.30 on BSE that day, valuing the company at $13.3 billion. Zomato had crossed the market capitalization of ₹1 lakh crores soon after listing. It is now among the 50 most valuable publicly traded firms in India, beating Mahindra and Mahindra, Tata Motors, and Coal India Ltd.

The IPO of Zomato was India's biggest initial share sale offer since March 2020. The IPO had opened for subscription on July 14, in a price band of ₹72-76 per share and a 52.63 percent premium. It was closed on July 16.

The company’s revenue fell by nearly a quarter year-on-year to Rs 1,994 crores in FY21, according to its red herring prospectus released on July 8. Post a 23.5 percent decline in revenues in FY21 to Rs 1,993.8 crores (compared to Rs 2,604.7 crores in FY20) due to the COVID-19 pandemic, analysts expect growth to pick up sharply from FY22.

Zomato has consistently gained market share over the last four years to become the category leader in India in terms of gross order value (GOV) from October 2020 to March 2021. It generates a majority of its revenue from food delivery and the related commissions charged to its restaurant partners for using the platform.

Source: Hindustan Times