Zomato IPO Details and Grey Market Premium, Subscription Status, Allotment

 Zomato initial public offering (IPO) subscribed 4.79 times on the second day of bidding,  according to the data available on the exchanges. Retail investors had subscribed 4.73 times the share portion that was reserved for them. Along the same line. The individual retail investors bid for 51.36 crore shares against the 12.95 crore reserved for them by the after on July 15. The public offer received a total of 344.76 crore crore equity share bids against an IPO size of 71.92 crore, as per exchange data.

    In terms of the Qualified Institutional Buyers (QIBs), they had subscribed Zomato IPO 7.06 times while Non-Institutional Investors (NIIs) placed their bids for 45 per cent against their allotted portion. Employees also had a portion reserved for them, which was subscribed at 36 per cent.

On Day-1 of the IPO opening, within the first few hours, the retail segment was subscribed nearly 100 per cent. At the time retail investors were bidding 2.7 times the number of shares allotted to them. On the first day of bidding, the offer also received bids for 75.60 crore equity shares against the existing IPO size of 71.92 crore as per stock exchange data. The company raised Rs 4,195 crore from 186 anchor investors on July 13.

To date, this is one of the biggest IPOs that the country has witnessed from the start-up space this year, as the food delivery giant leads the pack with its historical public issue. The IPO which is set to close on Friday has a price band of Rs 72 to Rs 76 per equity share. The IPO size which was initially Rs 9,375 crore was reduced to Rs 5,178.49 crore.

In the grey market, Zomato shares have been trading at a premium of Rs 14 on the third day, higher than Rs 8.75 to Rs 9 on the first day. This indicates that Zomato share may get listed around Rs 82 to Rs 86 in the market against the issue price of Rs 72 to Rs 76. The jump in grey market premium may attract some bidders to apply for Zomato IPO for the remaining session, analysts believe.

Zomato is possibly looking to list its public issue on July 27, though that is yet to be confirmed. Along the same line, the allotment status of this massive IPO is most likely to be made public knowledge on or by July 22 according to reports. The IPO hit the ground running as the public issue was nearly fully subscribed at the upper end of its allocated price band of Rs 72 to Rs 76. On opening day, the FIIs placed bids for around 13 per cent against their reserved portions while QIBs were almost fully subscribed with 38.88 crore shares. The FIIs sought 35.84 shares on Day-1 of the issue. By 17:00 hours, the total shares stood at 34.88 crores shares. This brought the public issue’s subscription to almost 1.05 times on Day 1.

“The IPO is valued at 28.3x of FY21 EV to sales, which looks to be stretched. It has Swiggy as a comparable peer in India, which is not listed. In our view, online food delivery market in India is likely to remain a duopoly of Zomato and Swiggy with limited disruptions. Given average MAU of 61mn (Zomato + Swiggy) for online food delivery services in total internet users population of >624mn, we believe online food deliver industry can potentially see sustain double-digit growth in the coming years. Therefore, considering huge scalability in business, duopoly market and asset light business model, we recommend SUBSCRIBE to this IPO from long-term perspective” Reliance Securities earlier said in a note.