Zomato, a Food delivery platform, is opening its initial public offering (IPO) to raise Rs 9,375 crore, with its shares.
These shares are predicted to cost Rs 72-76 per piece. In its red coloured brochure, the company said that Rs 9,000 crore will be a fresh issue and an offer for sale of Rs 375 crore by the investor Info Edge. The offer for a subscription commenced on July 14 and closed by July 16.
The offer initially began at Rs 8,250 crore and was hiked to Rs 9,375 crore afterwards.
Zomato’s chief financial officer, Akshant Goyal and co-founder, Gaurav Gupta said the offer was increased because the company had the potential to offer more flexibility from investors.
The company on Thursday in a press conference said, "it is looking at a post-issue valuation of Rs 64,365 crore at the upper end of the price band” and further added that with the IPO, its cash reserve will reach roughly Rs 15,000 crore.
Earlier in July, the startup which is headquartered at Gurugram received the go-ahead from markets regulator SEBI after filing prefatory papers in April. The company said that process from the fresh issue would be used towards funding organic and inorganic growth initiatives; and general corporate motives.
Also Read: Checkout Zomato's Smart & Quirky Marketing That Defies The Norms
Zomato further said that funds raised from the fresh issue will be used for three things — organic growth (to continue to invest in new consumer attraction, growing delivery infrastructure, and the technology), inorganic initiatives through investing (such as Grofers) or purchase, and up to 25% towards common corporate motivation.
On being questioned about the National Restaurant Association of India reaching out to CCI over anti-competitive prices of websites, Zomato said they are yet to get anything, and that some concerns are “misplaced”.
In addition to this, the company which got into the food market like Amazon Food has had no major effect on market shares so far. Currently, Amazon Food is operational in Bengaluru.
Besides this, Zomato said that it will be adding a feature of delivering groceries on the app too, which had begun during the lockdown last year but discontinued after some time. This comes after the company picked up only some stake in grocery delivery company Grofers.
Zomato is already selling nutraceutical products on the app.
Zomato’s financials as part of its red brochure showed that their revenue reduced down by 23% per year in FY21, but losses decreased as well. The company’s losses decreased from Rs 2,363 crore to Rs 812 crore. Akshay Goyal, the CFO mentioned during the press conference that if the loss of the first two quarters is removed, which was when the lockdown was enforced, business is boosting right now.
Also Read: OnePlus Nord 2 5G: Launch date, design, specifications, check all the details here
In February, Zomato had raised over Rs 1,800 crore funds from Tiger Global, Kora and others, valuing it at $5.4 billion.