Zomato IPO Fully Sold!

Bloomberg on July 16 2021 reported Zomato Ltd’s US$1.3 billion initial public offering was fully subscribed on its first day. Zomato, an Indian online food delivery platform, got bids for about 749 million shares against 719.2 million shares on offer. Its IPO is set to be India’s biggest since March 2020.

Internet-based consumer companies have become more popular as the pandemic fueled the adoption of digital technologies. The high investor recognition is a boon. Blackrock Inc and Fidelity International Ltd were among the dozens of anchor investors that piled into Zomato’s float, resulting in the company receiving about 35 times more bids than it had expected to sell.

 

Another closely watched initial public offering from India is the pending deal by digital payment startup Paytm, also backed by Jack Ma’s Ant Group. With investors SoftBank Group Corp and Berkshire Hathaway Inc, India’s leading fintech firm is seeking around US$3 billion in what could be the country’s largest debut ever. Its shareholders approved a resolution to sell 120 billion rupees (US$1.6 billion) of new shares.

 

These two unicorns — or privately held startups valued at at least US$1 billion — are coming to a market already enjoying blockbuster listings. About US$5.6 billion has been raised in initial public offerings on Indian stock exchanges so far in 2021. UBS Group AG expects the annual tally to be more than double last year’s US$4.6 billion.

 

Stocks that have debuted this year are up by an average of 62%, according to data compiled by Bloomberg — buoyed by a liquidity-fueled stock market that has defied one of the world’s worst Covid-19 outbreaks.

 

Already, Zomato and Paytm’s popularity among institutional investors is prompting the other unicorns in India. Among those are cosmetics retailer Nykaa E-Retail Pvt and Policybazaar Insurance Web Aggregator Pvt Ltd. A Credit Suisse Group AG report this year found there are about 100 unicorns in India with a combined market value of US$240 billion, in sectors from e-commerce and fintech to education, logistics and food delivery.

 

Zomato’s losses stood at 6.82 billion rupees (US$91.7 million) for the nine months ended December 2020, according to the IPO draft prospectus it filed with the Indian market regulator. Paytm parent, One 97 Communications’s consolidated losses for the financial year ended March 2021 were at 17.01 billion rupees.

It is all about revenue these days and not so much about profits – Facebook and Amazon are examples. Will we do that in Malaysia? Allow listings of high-growth stocks?

Source: https://www.facebook.com/zomato/

Reference:

Zomato US$1.3b IPO fully sold as India unicorns line up, Nupur Acharya & Baiju Kalesh, Bloomberg, July 16, 2021, (https://ceomorningbrief.theedgemalaysia.com)