ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
IPO

Zomato soars in India market debut to $12bn valuation

Shares soared 82.8% after opening at 116 rupees in pre-open trade

The stellar debut, which was advanced by four days, reflected investor interest in internet-based consumer startups that are expected to thrive during the COVID-19 pandemic and comes at a time when India's stock market is near all-time highs.   © Reuters

BENGALURU (Reuters) -- Food delivery firm Zomato shares on Friday nearly doubled in a stellar first listing of a local unicorn in India, setting the pace for a slew of such debuts by internet-based startups that are thriving during the COVID-19 pandemic.

Berkshire Hathaway Inc-backed Paytm, hospitality company Oyo Hotels and ride-hailing firm Ola, both backed by SoftBank, are among the startups set to enter markets, riding on support from foreign funds and local investors.

Shares of Zomato, backed by China's Ant Group, soared 82.8% after opening at 116 rupees in pre-open trade, a 53% premium to the offer price of 76 rupees for the 93.75 billion rupees IPO, valuing the company at about $12 billion.

"Growth is key here. Zomato might not be profitable but it is growing exponentially and is enviably positioned to keep that momentum," said Danni Hewson, a financial analyst with AJ Bell, an investment platform in England.

"Being first in a sector that's been so successful in other countries will whet the appetite even more."

Zomato is the first startup to go public in India's food delivery market, which research firm RedSeer estimated is worth $4.2 billion.

The home-grown food aggregator, launched in 2008, operates in about 525 cities in India and has partnered with close to 390,000 restaurants.

It offers home delivery of food, allows customers to book tables for dining-in and collates restaurant reviews, making it a competitor to SoftBank-backed Swiggy and Amazon.com's food delivery service.

The company's offering last week drew bids worth $46.3 billion as it was more than 38 times oversubscribed, with big institutional investors also placing major bets.

Zomato's loss for the year ended March 31 narrowed to 8.13 billion rupees, while revenue from operations fell slightly year-on-year to 19.94 billion rupees.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends July 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more